Blockchain-Enabled Smart Contracts: Legal Status, Challenges, And The Way Forward In India - A Comparative Study
- IJLLR Journal
- 33 minutes ago
- 2 min read
Shruti Vasani & Priyanka Vanvari, NMIMS’S Kirit P Mehta School of Law, Mumbai
ABSTRACT
This paper looks at the issue of legality for smart contracts which are based on blockchain technology within the Indian context. We look at how they are enforced under present contract, IT, and evidence laws and also see how India does or does not align with other foreign jurisdictions. We identify what the legal gaps are and put forth proposals for reform which will in turn provide certainty and accountability.
Introduction
21st Century can be defined as the century of innovations, as we are moving forward, we are welcoming many new technological advancements. Blockchain technology is one of the most significant technological innovations that has emerged and affected the data, transactions and contractual relations are executed and recorded. Blockchain is basically a shared, immutable ledger which records business transactions, assets etc. within the network allowing for a single source of truth. Unlike traditional systems, the blockchain technology lacks the need of an intermediary, mostly depending on the cryptographic techniques and consensus mechanisms to record and verify the records. This structure enhances trust, minimizes manipulation and ensures data validity.
Emerged from this block chain technology is the smart contracts, these contracts rely on algorithmic execution and lacks human intervention. This is very different from traditional notion of contract formation. These contracts are automatically executed when terms of contracts are met. These mostly work on “IF/When condition” like releasing funds to the appropriate parties, registering a vehicle, sending notifications or issuing a ticket. These contracts have particularly gained traction in the recent years due to their ability to automate contractual performance in a trust less environment. They increase certainty by eliminating the need for third party oversight, reduced transportation cost and faster execution.
