Smart contract is a piece of code that works automatically when certain conditions are met on the blockchain.
Legal Quality
- Expression of the will of the parties through code
- The contract regulated in Articles 1 and 12 of the Turkish Code of Commerce is valid due to its freedom of form
- However, court interpretation is technical. may be
Advantages
- Automatic execution
- Intermediary transaction
- Transparency
- Low cost
- Low risk of manipulation
Disadvantages
- Code error is irreversible (immutable)
- Poor connection to the real world (oracle problem)
- Right remedies are limited
- Legal uncertainty
Rights
- Interpretation of the contract (TBK art.18)
- Error, fraud, pressure (TBK art.30 et al.)
- Stopping the smart contract (court decision is difficult)
- Mutual compromise
Signing Form
- With wallet signature
- Connection with qualified e-signature is recommended (Law No. 5070)
- Smart contract signed with qualified e-signature = same as wet signature
Controversial Issues
- Authority: Where is the smart contract executed?
- Applicable law: which country?
- Tax liability
Practical Recommendations
- Add a written contract next to the smart contract
- Determine a dispute resolution method
- Have the code independently audited (audit)
- Increase security with multisig
Web3 and contract law lawyer is recommended.