How Smart Lawyers Handle Smart Contracts
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The Clio webinar discusses the application of smart contracts in law, highlighting their advantages and shortcomings compared to traditional contracts. Key topics include how to assist clients with smart contracts, the nature of disputes arising from them, and the importance of legal knowledge in understanding contract code. The session also emphasizes the growing use of smart contracts across various industries while outlining the need for careful review and tailored implementation.
How Smart Lawyers Handle Smart Contracts
- 1. A Clio Webinar How Smart Lawyers Handle Smart Contracts
- 2. Joshua Lenon • Lawyer in Residence at Clio • Attorney Admitted in New York • @JoshuaLenon
- 3. Amy Wan • Founder of Sagewise • Author of Bloomberg Law guide on Initial Coin Offerings • @AmyyWan
- 4. Agenda • Smart Contracts in law (10 minutes) • Smart Contracts in detail • Smart Contracts differ from traditional contracts (10 minutes) • Strengths and weaknesses of Smart Contracts (10 minutes) • How to help clients with their Smart Contracts (10 minutes) • What happens when a Smart Contract is in dispute (10 minutes) • Smart Contract resources (5 minutes) • Questions (5 minutes)
- 5. Smart Contracts in Law
- 6. Smart Contracts as Lawyer Alternatives
- 7. Smart Contracts in Sale of Goods
- 8. Smart Contracts for Home Ownership
- 9. Smart Contracts in Home Ownership
- 10. Smart Contract Use Expanding
- 11. Smart Contracts for the Public
- 14. Smart Contract Disputes • Types of disputes arising • Breach of contract or fraud in the delivery, mining, etc. of cryptocurrency; • Use of cryptocurrency as the method of payment for criminal enterprises (e.g., the illegal Silk Road or Alpha Bay marketplaces). These are primarily forfeiture cases; and, • Employment related disputes, including trade secret theft and unjust enrichment, with blockchain only relevant as part of the technology stolen.
- 15. Smart Contracts in Detail
- 16. How Smart Lawyers Handle Smart Contracts
- 19. This all results in decentralization & trustlessness Features of Blockchain • Consensus—all copies of ledgers agree • Provenance—knowledge of asset’s source and ownership change • Immutability—one party cannot change transaction after its recorded on the ledger • Finality—single shared ledger provides one place to determine ownership of asset/completion of transaction
- 21. What is a Smart Contract? • a smart contract is an agreement written in computer programming code
- 22. Strengths of a Smart Contract • Self execution of contract terms • Allows performance of credible transactions without third parties • Transactions are trackable and irreversible • Lower operating cost since no human intervention is required • Contains all information about coded contract terms
- 23. Shortcomings of a Smart Contract • Smart contracts often only written in code, requires knowledge of code to understand • Smart contracts are inflexible, only executes of programmed conditions are met • Current capabilities of smart contracts are very basic • Current legal structures not equipped to handle smart contract disputes
- 24. Vulnerabilities in Smart Contracts
- 25. >1 billion dollars (1.13M ETH) was lost in smart contracts in 2017 12% of ether is currently locked in smart contracts Over 1M smart contracts today 2016 2017 2018 InMillions 50M 1B >2B -Reddit post responding to the DAO 2016 hack which caused Ethereum to hard fork
- 26. Sources of Vulnerabilities in Smart Contracts
- 27. How to Help Clients with Smart Contracts • Counsel clients as you would for traditional contracts • Have team member or advisor that is capable of reading code • Careful review of contract code so that it embodies intent of parties • Whenever using existing code from public sources, carefully review and tailor code for clients need (do not simply copy paste) • Understand limitations and capabilities of different blockchains • e.g., ETH only requires smart contract without dispute resolution while EOS requires smart contract and Ricardian contract to document intent • Implement safety net in smart contract such as using Sagewise SDK
- 28. Result: Increased transactional confidence in smart contracts
- 29. TARGET MARKET financial services supply chain/ cross-border trade digitized assets insurance
- 33. A Beginner’s Guide to Smart Contracts https://blockgeeks.com/guides/smart-contracts/
- 35. Clause.io
- 37. Sagewise.io