Smart contracts are increasingly recognized as legally enforceable, provided they adhere to traditional contract law principles such as offer, acceptance, consideration, and intent to be bound, according to a legal analysis by Kelman Law. States like Arizona have explicitly acknowledged their enforceability, while others apply existing contract laws. Recent court cases, such as Van Loon v. Department of the Treasury, emphasize the importance of consent and control over technical complexity.
Despite their growing acceptance, smart contracts face challenges including immutability, the absence of identifiable operators, and compliance with the statute of frauds. Kelman Law suggests practical measures for drafting enforceable smart contracts, such as employing plain-language agreements and integrating hybrid on-chain/off-chain structures to enhance clarity and legal compliance.
Smart Contracts Gain Legal Recognition Amid Challenges
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