Posted on: 25 November 2021
On November 25, the Law Commission has published its paper “Smart legal contracts: advice to Government”, which provides a detailed analysis of the current law of contract as it applies to smart legal contracts. The analysis and findings in the paper were informed by the detailed responses we received to our call for evidence, published in December 2020.
The Law Commission, which is a statutory independent body, has concluded that the existing law of England and Wales is clearly able to facilitate and support the use of smart legal contracts, without the need for statutory law reform. Current legal principles can apply to smart legal contracts in much the same way as they do to traditional contracts, albeit with an incremental and principled development of the common law in specific contexts.
The Commission thanks those stakeholders who responded to its call for evidence, or who have otherwise met and corresponded with it during the course of the project.
A summary of the paper, as well as the paper itself, can be downloaded here.
Interim update paper on digital assets project
The Law Commission has also published a short update paper relating to our digital assets project, which seeks to support and facilitate the development of digital assets, including cryptoassets, and to suggest law reform where necessary. The interim paper includes an update on the status and timing for its digital assets project. It also includes an update on the scope and detail of the project, following feedback received from market participants and stakeholders.
Future Law Commission work on conflict of laws and emerging technology
The work on smart legal contracts, digital assets and electronic trade documents has identified difficulties in applying conflict of law rules to the “virtual world”. The problem of digital location – that is, the difficulty of ascribing real-world locations to digital actions and digital objects – is amongst the most significant challenges that private international law will have to overcome in relation to emerging technology.
The Law Commission has now agreed with Government to undertake a project looking at the rules relating to conflict of laws as they apply to emerging technology, including smart legal contracts and digital assets, and considering whether reform is required. The Commission hopes to be in a position to begin work on the new conflict of laws project in mid-2022. If you would like to be kept updated about this work, please email at email@example.com.