Liability in the context of blockchain smart contract nexus: Introductory considerations
Blockchain technology becomes relevant in economic exchange as it lowers costs and contributes to cost efficiency and effectiveness of economic transactions. The key quality of Blockchain lies in ensuring the authenticity of digital data: trust in the traditional legal relationship has been replaced by digital verification of data in blocks. As an important phenomenon, Blockchain calls for legal answers on the issues arising from its application. An example of this development is the legal regime of smart contracts. A smart contract is a transaction in which any rights and obligations of the contracting parties are programmed in a code. Being the result of Blockchain technology application, such a contract implies the need for trust between the contracting parties. As a legal phenomenon, Blockchain (smart contract) technology raises the issue of liability for performing contractual obligations. Smart contracts can minimize certain contract risks and additionally simplify contract execution. They are immediately put into effect, without the need for any further interaction between the parties. The essential components of smart contracts are the digitally verifiable data and the automatic performance of legally relevant actions based on digitally received and processed information. All of the enlisted issues are important for proper understanding of liability of Blockchain actors.