UK Law Commission, an independent body established by the British Parliament has launched a research project for investigating reforms into blockchain-based smart contracts. The research project which was announced on Thursday 19, July through a working paper aims to bring “legal clarity” on the use of blockchain-based smart contracts technologies.
Although the UK Law Commission has already carried out an initial study on blockchain smart contracts, the commission believes that a more thorough project is necessary. In that regard, a formal project is expected to commence at the end of the year. The agency said that the research it is conducting is to “ensure that the law is sufficiently certain and flexible to apply in a global, digital context and to highlight any topics which lack clarity or certainty.”
Smart Contract Increases Trust and Business Efficiency
A smart contract is a computer protocol which helps in exchanging money, assets, shares and other valuables. It digitally allows for secure transactions to be possible by verifying and enforcing the relevant negotiations. The process allows for a credible transaction process without the need for a third party
An official at the Law Commission is certain that smart contract will eliminate distrust, increase certainty and business efficiency. Thus the publication denotes that “It is important to ensure that English courts and law remain a competitive choice for business. Therefore, there is a compelling case for a Law Commission scoping study to review the current English legal framework as it applies to smart contracts.”
Back in 2017, the Law Commission released a report which highlights the 14 critical areas about smart contracts which needs reform. At the time, the commission said: “there are questions about how this feature (smart contract) would interact with contract law concepts such as implied terms or contracts which are held to have been void from the outset. There are also questions about data protection law.”
If implemented, the Law Commission believes that the research process could take anywhere between 9 to 18 months to complete.