Legal Obstacles to Concluding Smart Contracts

Abstract

As is its custom, modern science has introduced us to a new technology called smart contracts, which are self-enforcing. This necessitates legal professionals, including researchers and judges, to clarify their legal status. As a starting point, we must define smart contracts, clear their characteristics, and subsequently examine their legal nature and compatibility. Finally, we will discussion into the technology underpinning them: blockchain. Moreover, this type of contract was not contemplated or imagined by the Iraqi legislator when enacting the Civil Code due to its novelty. Law of Electronic Signatures and Transactions No. (78) of 2012 also does not address it directly or in detail. Furthermore, other domestic and international laws either do not address it at all or do so in a cursory manner, without delving into the necessary details for regulating transactions involving such contracts. On the other hand, a number of legal issues and obstacles arise in the process of conclusion such contracts, including: their legality, the problem of litigation, the high cost of amending them if individuals desire to do so, the issue of rectifying errors that may occur during the formation process, and finally, the issue of concealing the identity of the contracting parties and the various obstacles and problems arising therefrom, most notably the question of whether the contracting parties have the necessary legal capacity. All of these issues have been discussed in this paper, and we have arrived at a number of conclusions and put forward several recommendations.