Corruption is a major global financial problem with billions of dollars rendered lost or unaccountable annually. Corruption through contract fraud is often conducted by withholding and/or altering financial information. When such scandals are investigated by authorities, financial and legal documents are usually altered to conceal the paper trail.
Smart contracts have emerged in recent years and appear promising for applications such as legal contracts where transparency is critical and of public interest. Transparency and auditability are inherent because smart contracts execute operations on the blockchain, a distributed public ledger.
In this paper, we propose the Minimum Hybrid Contract (MHC), with the aim of introducing 1) auditability, 2) transparency, and 3) immutability to the contract's financial transactions. The MHC comprises an online smart contract and an offline traditional legal contract. where the two are immutably linked.
Secure peer-to-peer financial transactions, transparency, and cost accounting are automated by the smart contract, and legal issues or disputes are carried out by civil courts. The reliance on established legal processes facilitates an appropriate adoption of smart contracts in traditional contracts.
Smart Contract Templates support legally-enforceable smart contracts, using operational parameters to connect legal agreements to standardised code. In this paper, we explore the design landscape of potential formats for storage and transmission of smart legal agreements. We identify essential requirements and describe a number of key design options, from which we envisage future development of standardised formats for defining and manipulating smart legal agreements. This provides a preliminary step towards supporting industry adoption of legally-enforceable smart contracts.
In this position paper, we consider some foundational topics regarding smart contracts (such as terminology, automation, enforceability, and semantics) and define a smart contract as an automatable and enforceable agreement. We explore a simple semantic framework for smart contracts, covering both operational and non-operational aspects, and describe templates and agreements for legally-enforceable smart contracts, based on legal documents. Building upon the Ricardian Contract, we identify operational parameters in the legal documents and use these to connect legal agreements to standardised c…
High-value derivatives contracts require substantial legal protection and often utilise standardised legal documentation provided by the International Swaps and Derivatives Association (ISDA). Smart Derivatives Contracts aim to automate many aspects of high-value contracts, including automation of the provisions of the ISDA legal documentation. Here we investigate how the ISDA Master Agreement may affect the automation of payments and deliveries: we provide a framework for understanding how high-value derivatives contracts are structured at different levels, in terms of both the legal document…
We present a smart legal contract platform to support a wide range of smart legal contract use cases. We see this as a step towards improving existing approaches to representing the complexity of legal agreements and executing aspects of these agreements.
The paper outlines ongoing research on logic-based tools for the analysis and representation of legal contracts of the kind frequently encountered in large-scale engineering projects and complex, long-term trading agreements. We consider both contract formation and contract performance, in each case identifying the representational issues and the prospects for providing automated support tools.
Recent trends reveal the search by companies for a legal hook to prevent the undesired and unauthorized copying of information posted on websites. In the center of this controversy are metasites, websites that display prices for a variety of vendors. Metasites function by implementing shopbots, which extract pricing data from other vendors' websites. Technological mechanisms have proved unsuccessful in blocking shopbots, and in response, websites have asserted a variety of legal claims. Two recent cases, which rely on the troublesome trespass to chattels doctrine, suggest that contract law may…
Using dedicated software to represent or enact legislation or regulation has the advantage of solving the inherent ambiguity of legal texts and enabling the automation of compliance with legal norms. On the other hand, the so-called code-driven normativity is less flexible than the legal provisions it claims to implement, and transforms the nature of legal protection, potentially reducing the capability of individual human beings to invoke legal remedies. In this article we focus on software-based legal contracts; we illustrate the design of a legal calculus whose primitives allow a direct for…
We describe a method and tool called \textit{ContractCheck} that allows for the consistency analysis of legal contracts, in particular Sales Purchase Agreements (SPAs). The analysis relies on an encoding of the premises for the execution of the clauses of an SPA as well as the proposed consistency constraints using decidable fragments of first-order logic. Textual SPAs are first encoded in a structured natural language format, called blocks. \textit{ContractCheck} interprets these blocks and constraints and translates them in first-oder logic assertions. It then invokes a Satisfiability Modulo…
As more and more data is collected for various reasons, the sharing of such data becomes paramount to increasing its value. Many applications ranging from smart cities to personalized health care require individuals and organizations to share data at an unprecedented scale. Data sharing is crucial in today's world, but due to privacy reasons, security concerns and regulation issues, the conditions under which the sharing occurs needs to be carefully specified. Currently, this process is done by lawyers and requires the costly signing of legal agreements. In many cases, these data sharing agree…
We argue that there is a hierarchy of levels describing to that particular level relevant features of reality behind the content and behavior of blockchain and smart contracts in their realistic deployment. Choice, design, audit and legal control of these systems could be more informed, easier and raised to a higher level, if research on foundations of these descriptions develops and sets the formalisms, tools and standards for such descriptions.
University of Chieti-Pescara（基耶蒂-佩斯卡拉大学）；ISTI-CNR Pisa（比萨国家研究委员会信息科学与技术研究所）；Pi School（Pi学院）
This paper aims to investigate the possibility of using artificial intelligence (AI) to resolve the legal issues raised by the Covid-19 emergency about the fate of continuing execution contracts, or those with deferred or periodic execution, as well as, more generally, to deal with exceptional events and contingencies. We first study whether the Italian legal system allows for ''maintenance'' remedies to cope with contingencies and to avoid the termination of the contract, while ensuring effective protection of the interests of both parties. We then give a complete and technical description of…
"Code is law" refers to the idea that, with the advent of digital technology, code has progressively established itself as the predominant way to regulate the behavior of Internet users. Yet, while computer code can enforce rules more efficiently than legal code, it also comes with a series of limitations, mostly because it is difficult to transpose the ambiguity and flexibility of legal rules into a formalized language which can be interpreted by a machine. With the advent of blockchain technology and associated smart contracts, code is assuming an even stronger role in regulating people's in…
A computable contract is a contract that a computer can read, understand and execute. The financial services industry makes extensive use of contracts, for example, mortgage agreements, derivatives contracts, arbitration agreements, etc. Most of these contracts exist as text documents, making it difficult to automatically query, execute and analyze them. In this vision paper, we argue that the use of computable contracts in the financial services industry will lead to substantial improvements in customer experience, reductions in the cost of doing legal transactions, make it easier to respond …
A Comprehensive Framework for Reliable Legal AI: Combining Specialized Expert Systems and Adaptive Refinement
Università di Verona（维罗纳大学）；Salim Habib University（萨利姆哈比布大学）；Canadian Institute of Cybersecurity (CIC), University of New Brunswick（新不伦瑞克大学加拿大网络安全研究所）；Institute of Business Administration（商业管理学院）
Temporary work is an employment situation useful and suitable in all occasions in which business needs to adjust more easily and quickly to workload fluctuations or maintain staffing flexibility. Temporary workers play therefore an important role in many companies, but this kind of activity is subject to a special form of legal protections and many aspects and risks must be taken into account both employers and employees. In this work we propose a blockchain-based system that aims to ensure respect for the rights for all actors involved in a temporary employment, in order to provide employees …
Blockchain-driven technologies are considered disruptive because of the availability of dis-intermediated, censorship-resistant and tamper-proof digital platforms of distributed trust. Among these technologies, smart contract platforms have the potential to take over functions usually done by intermediaries like banks, escrow or legal services. In this paper, we introduce a novel protocol aiming to execute smart contracts as part of a blockchain transaction validation. We enable extensions in the execution of smart contracts while guaranteeing their privacy, correctness and verifiability. Man-…
The developers of Ethereum smart contracts often implement administrating patterns, such as censoring certain users, creating or destroying balances on demand, destroying smart contracts, or injecting arbitrary code. These routines turn an ERC20 token into an administrated token - the type of Ethereum smart contract that we scrutinize in this research. We discover that many smart contracts are administrated, and the owners of these tokens carry lesser social and legal responsibilities compared to the traditional centralized actors that those tokens intend to disrupt. This entails two major pro…
