How Smart is Your Contract? Legal Considerations Around Smart Contracts

May 10, 2018 | Imran Ahmad | Toronto

Ontario Bar Association Information Technology and Intellectual Property Law section

In a 2016 report[1] by the World Economic Forum, it was suggested that smart contracts based on blockchain technology could potentially codify financial agreements in a shared platform and guarantee execution based on mutually agreed conditions. This would significantly reduce manual efforts required to support the execution of financial agreements and thereby, in theory, accelerate business processes. While the benefits associated with the application of blockchain technology to smart contracts are promising (e.g., operational simplification, counterparty risk reduction, clearing and settlement time reduction and fraud minimization), it brings with it important technical and legal issues.