Are Corda Contracts Legally Enforcable

(Donald Roy Airey) #1

I have a client that wants to put contracts on a Distributed Ledger and have both parties sign them electronically. I’m pretty familiar with PKI and Certificate Authorities, but I don’t see the connection to Corda contracts. Suppose we want a consumer, John Smith, to sign a binding agreement, like an IOU or a repayment agreement. First, where does John get his key pair? Second, how to we take John to a real-life court if he doesn’t agree with the terms of the contract?

(John Reynolds ) #2

Hi Donald,

Fews bits I’ve pulled together hope they help

The key concepts part of the site says ‘Whilst the contract code is a powerful means to verify transactions, it cannot handle all real word events e.g. complex disputes, fraud, arbitration. Corda contracts support the inclusion of the legal prose which can be relied upon when contract code alone is insufficient.’

The Corda introductory white paper states “The Corda platform supports smart contracts, matching the definition of Clack, Bakshi, Braine.3”

Link below its a good piece of research which discuss terminology, automation and enforceability of smart contracts.

In terms of how is the contract prose physically added its by an attachment to the transaction

Code-is-law vs. existing legal systems (extract from key concepts)

Financial institutions need the ability to resolve conflicts using the traditional legal system where required. Corda is designed to make this possible by:

Having permissioned networks, meaning that participants are aware of who they are dealing with in every single transaction

All code contracts are backed by a legal document describing the contract’s intended behavior which can be relied upon to resolve conflicts