The masters thesis presented here deals with legal effects of blockchain-based smart contracts from the perspective of contractual-law in theory and law in action, especially with respect to their legal bindingness. The main hypothesis is that smart contracts are perfectly valid contractual agreements, provided that prerequisite legal elements such as the meeting of minds, causa (i.e. consideration), legally-valid obligation, are in fact present. Actual presence of cited elements implies voidness of smart contracts which author tackles through the doctrine of mistake. Author furthermore differentiates between smart contracts and the so-called Ricardian contracts and lastly, explores potential civil liability of a programmer that can arise from his erronous drafting of a legal smart contract for another person to use. Possible solutions offered are analogous to those that are generally used for legal interpretation of service contracts with regard to programmers. Finally, author concludes that the term “contract” originally from the area of IT-technology, can also mean legal-contract and draws a distinction. With respect to the legal and economic analysis of smart contracts presented in this thesis it is therefore concluded that - while smart contracts should be welcomed as a useful expansion of legitimate commercial transactions - this does not come without it’s inherent newlyfound risk to parties of smart contracts. While they guarantee perfect performance, legal smart contract infact effectively precludes its party from externalising any mistakes of will that can arise in the process of concluding such contract while conversly, this same effect enhances party reliance and party autonomy. Also, it remains to be seen how courts would interpret legal smart contracts and their intended effects due to non-existence of court decisions from this particular area.
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