Legal Effect of Smart Contracts Based on Blockchain

Abstract

Smart contracts are increasingly used in financial innovation area. In view of smart contracts’ legal effects, a study is implemented in this paper. First, Smart contracts appear as a set of computer codes, and carry the mutual consensus of the transaction parties and under the principle of freedom of contract form. Thus, smart contracts can be understood as a type of contractual written form in the high-tech context. Then the agreement automatic enforcement was made by the five-element structure, and the traditional situation of enforcement uncertainty was avoided. The results show that it is necessary to examine whether the meaning of the machine matches the meaning of the party, and whether the machine meaning is in conformity with the legal provisions. Finally, the conclusion was drawn that the legal effect of smart contract can be clarified in response to the booming financial technology.