Bridging Code And Law: The Legal Landscape Of Smart Contracts
- IJLLR Journal
- Nov 12, 2025
- 2 min read
Kashish Mamnani, Jigeesha Vaishnav & Akshara Dubey, Institute of Law, Nirma University
ABSTRACT
Smart contracts are of the nature of self-executing contracts that are programmed on blockchain platforms, represents a revolutionary change in online transactions. This research piece critically analyses the legalities of smart contracts in the Indian legal framework. It also deals with their legal enforceability under the Indian Contract Act, 1872, evidentiary admissibility under the Bharatiya Sakshya Adhiniyam, 2023 and the challenges posed by their intrinsic immutability.
The technical framework of smart contracts is the subject of this article, with a distinction between strong (fully autonomous) and weak (hybrid) types and their nexus with traditional legal concepts such as offer, acceptance, and consideration. Smart contracts are capable of satisfying basic contractual requirements, but it has loopholes, particularly in the use of cryptocurrency as consideration, given the regulatory confusion in India concerning digital assets.
One of the main concerns is the tension between the immovability in blockchain and the flexibility required by legal doctrines such as rescission, restitution, and amendment. The decentralized nature of blockchain and the reliance on cryptographic keys rather than state-authorized digital signatures create additional problems under the Information Technology Act, 2000 and for certification as evidence under the Bharatiya Sakshya Adhiniyam, 2023.
This article also reflects a comparative approach by comparing progressive regulatory strategies of various nations such as EU, the U.S. and the UK, which offer technology-neutral frameworks for the recognition of smart contracts. Such insights are utilized to compare and suggest reforms in the Indian context.
The article ends with the determination of major legal loopholes and prescribing statutory acknowledgment of cryptographic signatures, certification protocols specific to blockchain and judicial "legal overlays" to accommodate modification of the contract in extraordinary situations. The article seeks to offer a roadmap for harmonizing smart contract innovation with India's core legal principles.
