A legal analysis of the use of blockchain technology for the formation of smart legal contracts

The object of the present work is to provide a legal analysis of the formation of legally binding agreements through blockchain-based smart contracts. Smart contracts are computer codes that are capable of running automatically upon the occurrence of specific conditions and according to pre-specified functions. These codes can be stored and processed on a blockchain and any change is recorded in the blockchain. The expression “smart legal contract” refers to the use of smart contracts in the contractual domain to perform already existing contracts or to express legally binding agreements in the form of lines of computer code. Regarding the latter, researchers question whether blockchain-based smart contracts can be considered legally binding contracts. The study aims at putting in correlation contract requirements with blockchain-based smart contracts. The scope of the analysis is to verify how to interpret the rules on contract formation to make blockchain-based smart contracts fit into contract law.