{"id":287141,"date":"2025-08-06T16:00:00","date_gmt":"2025-08-06T14:00:00","guid":{"rendered":"https:\/\/dailyjus.com\/?p=287141"},"modified":"2025-08-06T15:42:18","modified_gmt":"2025-08-06T13:42:18","slug":"smart-contracts-global-perspectives-and-legal-realities-part-2","status":"publish","type":"post","link":"https:\/\/dailyjus.com\/index.php\/2025\/08\/06\/smart-contracts-global-perspectives-and-legal-realities-part-2\/","title":{"rendered":"Smart Contracts: Global Perspectives and Legal Realities &#8211; Part 2"},"content":{"rendered":"\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>THE AUTHOR<\/strong>:<br><strong>Dalila Djamane<\/strong>, Legal Advisor<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p class=\"has-text-align-center wp-block-paragraph\"><em>This <a href=\"https:\/\/dailyjus.com\/?s=Dalila+Djamane\" target=\"_blank\" rel=\"noopener\" title=\"\">series<\/a> explores the evolving landscape of arbitration and alternative dispute resolution (<strong>ADR<\/strong>) in the <strong>Middle East<\/strong>, with a focus on innovation, legal reform, and regional best practices. Each article offers insight into emerging trends\u2014from <strong>digital transformation<\/strong> and <strong>legal tech <\/strong>to <strong>cross-border enforcement <\/strong>and <strong>institutional developments<\/strong>. <a href=\"https:\/\/dailyjus.com\/?s=Dalila+Djamane\" target=\"_blank\" rel=\"noopener\" title=\"\">Stay tuned<\/a> as we unpack key themes shaping the future of dispute resolution in the region.<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Smart contracts are increasingly used across industries, particularly in digital finance, real estate, and dispute resolution. As blockchain adoption grows, so does the legal community\u2019s interest in understanding whether and how smart contracts are enforceable under existing laws.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This article provides a clear overview of what smart contracts are, how they work, and the current state of legal recognition in key jurisdictions.<\/p>\n\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What Are Smart Contracts?<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Despite the name, smart contracts are neither basically &#8220;smart&#8221; nor traditional legal contracts. A smart contract is a <strong>self-executing program<\/strong> stored on a blockchain. It performs specific actions automatically once predefined conditions are met.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For example, in a simple <strong>real estate<\/strong> transaction, a smart contract could be designed to transfer digital ownership of a property token once payment is confirmed \u2014 all without human intervention.<\/p>\n\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Do Smart Contracts Replace Legal Contracts?<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">No. While a smart contract can carry out part of an agreement, it is not a legal contract by default. Its legal status depends on:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The <strong>intention of the parties<\/strong><\/li>\n\n\n\n<li>Whether it satisfies the requirements of a binding contract (e.g., offer, acceptance, consideration, and intent)<\/li>\n\n\n\n<li>The <strong>jurisdiction<\/strong> in which it is used<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Smart contracts are better seen as a tool to <strong>automate performance<\/strong> of certain clauses rather than a substitute for legal drafting.<\/p>\n\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Practical Use Cases<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Smart contracts are increasingly used in:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Real Estate<\/strong>: Automating rent payments or holding escrow<\/li>\n\n\n\n<li><strong>Finance<\/strong>: Triggering repayments or interest calculations<\/li>\n\n\n\n<li><strong>Insurance<\/strong>: Automating claims processing based on verified events<\/li>\n\n\n\n<li><strong>Supply Chain<\/strong>: Releasing payments upon delivery confirmation<\/li>\n\n\n\n<li><strong>Dispute Resolution<\/strong>: Enforcing digital settlement agreements or penalties<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">They are most effective when conditions are clear and actions are purely digital.<\/p>\n\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Legal Recognition Across Jurisdictions<\/strong><\/h2>\n\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><a href=\"https:\/\/jusmundi.com\/en\/d\/profile\/state\/us?__hstc=118210966.6cdcb464d1ebc92909de7c2263a7c25b.1752853927710.1753195022889.1753201069187.4&amp;__hssc=118210966.2.1753201069187&amp;__hsfp=475671096\" target=\"_blank\" rel=\"noopener\" title=\"\"><strong><em>United States<\/em><\/strong><\/a><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Several states have enacted laws recognizing smart contracts.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Arizona<\/strong> and <strong>Wyoming<\/strong> explicitly state that smart contracts can be legally enforceable.<\/li>\n\n\n\n<li>Contract law at the federal level still applies: if the smart contract meets legal elements, it is likely to be recognized.<\/li>\n<\/ul>\n\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><a href=\"https:\/\/jusmundi.com\/en\/d\/profile\/state\/gb?__hstc=118210966.6cdcb464d1ebc92909de7c2263a7c25b.1752853927710.1753195022889.1753201069187.4&amp;__hssc=118210966.2.1753201069187&amp;__hsfp=475671096\" target=\"_blank\" rel=\"noopener\" title=\"\"><strong><em>United Kingdom<\/em><\/strong><\/a><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">In 2021, the UK Law Commission affirmed that English law can accommodate smart contracts, even without legislative change. Courts have already considered blockchain evidence and code as part of contract disputes.<\/p>\n\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><a href=\"https:\/\/jusmundi.com\/en\/d\/profile\/state\/ae?__hstc=118210966.6cdcb464d1ebc92909de7c2263a7c25b.1752853927710.1753195022889.1753201069187.4&amp;__hssc=118210966.2.1753201069187&amp;__hsfp=475671096\" target=\"_blank\" rel=\"noopener\" title=\"\"><strong><em>United Arab Emirates<\/em><\/strong><\/a><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The UAE has shown strong regulatory leadership. The <strong>DIFC<\/strong> and <strong>ADGM<\/strong> both support blockchain use, and the <a href=\"https:\/\/www.digitaldubai.ae\/initiatives\/blockchain\" target=\"_blank\" rel=\"noopener\" title=\"\"><strong>Dubai Blockchain Strategy<\/strong><\/a> promotes smart contracts in public and private sectors. While specific smart contract legislation is evolving, existing contract law frameworks can support enforceability.<\/p>\n\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><a href=\"https:\/\/jusmundi.com\/en\/d\/profile\/state\/sg?__hstc=118210966.6cdcb464d1ebc92909de7c2263a7c25b.1752853927710.1753195022889.1753201069187.4&amp;__hssc=118210966.2.1753201069187&amp;__hsfp=475671096\" target=\"_blank\" rel=\"noopener\" title=\"\"><strong><em>Singapore<\/em><\/strong><\/a><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A key fintech jurisdiction, Singapore allows digital contracts if traditional requirements are met. The <a href=\"https:\/\/sso.agc.gov.sg\/act\/eta2010\" target=\"_blank\" rel=\"noopener\" title=\"\"><strong>Electronic Transactions Act 2010<\/strong><\/a> supports smart contracts as part of the digital commerce infrastructure.<\/p>\n\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong><em>European Union<\/em><\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The <a href=\"https:\/\/eur-lex.europa.eu\/legal-content\/EN\/TXT\/?uri=CELEX:32023R1114\" target=\"_blank\" rel=\"noopener\" title=\"\">Regulation (EU) 2023\/1114 on Markets in Crypto-Assets<\/a> (\u201c<strong>MiCA\u201d)<\/strong> primarily targets crypto-assets, but smart contracts are indirectly covered. Some member states, such as Germany and France, have taken further steps in offering guidance or legal frameworks that support blockchain applications.<\/p>\n\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Key Legal Considerations<\/strong><\/h2>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Is the smart contract meant to be legally binding or just a technical tool? This affects enforceability.<\/li>\n\n\n\n<li>What if the code doesn\u2019t perform as intended? Many jurisdictions would defer to the underlying legal agreement or seek to understand the parties\u2019 original intent.<\/li>\n\n\n\n<li>Most smart contracts are immutable once deployed. It&#8217;s essential to incorporate options for upgrades or corrections (via admin keys or update mechanisms).<\/li>\n\n\n\n<li>Disputes involving smart contracts may require hybrid dispute resolution mechanisms \u2014 combining traditional legal recourse with blockchain-based tools for evidence and enforcement.<\/li>\n<\/ol>\n\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Implications for Legal Professionals<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Smart contracts are not replacing lawyers, but rather changing how we work. Legal professionals need to:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Understand how smart contracts operate technically<\/li>\n\n\n\n<li>Work with developers to ensure legal alignment<\/li>\n\n\n\n<li>Draft parallel agreements to cover what code can\u2019t<\/li>\n\n\n\n<li>Advise on applicable laws and dispute resolution options<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">In arbitration and ADR, lawyers may also encounter smart contract evidence or enforcement processes in blockchain disputes. It&#8217;s no longer enough to know the law \u2014 we must also understand the code that might carry it out.<\/p>\n\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Conclusion<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Smart contracts offer efficiency and automation, but legal enforceability still depends on intent, clarity, and local laws. Jurisdictions such as the <strong>U.S.<\/strong>, <strong>U.K.<\/strong>, <strong>UAE<\/strong>, and <strong>Singapore<\/strong> are moving forward with supportive legal frameworks, while others are closely watching.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For lawyers, arbitrators, and commercial parties, the message is clear: smart contracts are a valuable tool, not a full replacement for legal agreements. When used with care, they can streamline performance \u2014 but only if their legal status is clear from the start.<\/p>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>ABOUT THE AUTHOR<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Dalila Djamane<\/strong> is an international Legal Advisor with a focus on cross-border contracts, governance, and regulatory compliance. She brings a unique perspective shaped by experience across diverse jurisdictions, including Egypt, Algeria, Saudi Arabia, the UAE, the United States, and France. Bridging both civil and common law traditions, Dalila has advised on high-value real estate transactions, international trademark portfolios, and strategic investments in the MENA region. A strong advocate for legal innovation, she regularly writes on the intersection of law, technology, and international dispute resolution.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p class=\"wp-block-paragraph\">*<em><em>The&nbsp;views&nbsp;and opinions expressed by authors are theirs and do not necessarily reflect those of their organizations, employers, or Daily Jus, Jus Mundi, or Jus Connect.<\/em><\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Can smart contracts hold up in arbitration? Explore global legal perspectives and what they mean for enforceability in digital dispute resolution.<\/p>\n","protected":false},"author":4,"featured_media":286964,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jnews-multi-image_gallery":[],"jnews_single_post":{"subtitle":"","format":"standard","video":"","gallery":"","source_name":"","source_url":"","via_name":"","via_url":"","override_template":"0","override":[{"template":"custom","single_blog_custom":"274736","parallax":"1","fullscreen":"1","layout":"right-sidebar","sidebar":"author","second_sidebar":"default-sidebar","sticky_sidebar":"1","share_position":"hide","share_float_style":"share-monocrhome","show_share_counter":"0","show_view_counter":"0","show_featured":"1","show_post_meta":"1","show_post_author":"0","show_post_author_image":"0","show_post_date":"1","post_date_format":"default","post_date_format_custom":"Y\/m\/d","show_post_category":"0","show_post_reading_time":"0","post_reading_time_wpm":"300","show_zoom_button":"0","zoom_button_out_step":"2","zoom_button_in_step":"3","show_post_tag":"0","show_prev_next_post":"0","show_popup_post":"0","number_popup_post":"1","show_author_box":"0","show_post_related":"0","show_inline_post_related":"0"}],"override_image_size":"0","image_override":[{"single_post_thumbnail_size":"crop-500","single_post_gallery_size":"crop-500"}],"trending_post":"0","trending_post_position":"meta","trending_post_label":"Trending","sponsored_post":"0","sponsored_post_label":"Sponsored by","sponsored_post_name":"","sponsored_post_url":"","sponsored_post_logo_enable":"0","sponsored_post_logo":"","sponsored_post_desc":"","disable_ad":"0"},"jnews_primary_category":{"id":"146","hide":""},"jnews_social_meta":{"fb_title":"Smart Contracts: Global Perspectives and Legal Realities - Part 2","fb_description":"Can smart contracts hold up in arbitration? 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