Integration Of Blockchain’s ‘Trust Less’ System Into Legal Contracts
- IJLLR Journal
- 7 minutes ago
- 2 min read
Mohamed Zayd, School of Excellence in Law, Chennai
ABSTRACT
Blockchain technology, which Satoshi Nakamoto (2008) first introduced with the paper titled ‘Bitcoin: A Peer-to-Peer Electronic Cash System,’ talks about digital transactions from one person to another without the involvement of any financial body. The system works on proof of work and hash timestamps so that any contract made on the chain is publicly accessible and cannot be altered after the contract has been made. It is a completely decentralised and non-trust placing system which ignores any third-party involvement. This paper discusses blockchain and the future of Indian contracts along with it. Bringing this technology to our legal system will largely benefit the populace, as legal contracts made using blockchain will not only rid society of the manipulation of records, breach of contracts with no evidence, and the time at which the contract was made, but it can also be used as evidence in the court of law to prove the validity of the contract. Areas such as real estate transactions, property registration, insurance, and employment are more susceptible to contract manipulation. In modern-day India, contracts between two parties are governed by the Indian Contract Act of 1872. Four major steps are involved in forming a legally valid contract between two parties under the Indian Contract Act of 1872: Offer, Acceptance, Consideration, Consent. This paper will critically analyse how blockchain smart contracts are applicable under the Indian Contract Act of 1872, discussing their legality and whether courts recognise them. It will also examine the validity of contracts created on the blockchain and explore potential solutions to issues such as the lack of regulatory clarity, legal recognition of blockchain addresses, and enforcement challenges in cases of code-based errors or fraud. In the conclusion of this paper, the author has also provided provisions to healthily integrate blockchain into our system, and the author has also discussed how the issues in the passage can be resolved.
Keywords: Blockchain, Smart contracts, Indian Contract Act, Consensus, Decentralised.
