As mentioned in previous section, there is no clear definition of a “smart contract” in Austrian Legal System. However, we can assume that a smart contract is a technical code, implementing a traditional contract.

With a smart contract there is only one set of trade terms, predefined as code and self-executing upon the triggering event (e.g. payment being made), reducing misunderstandings on contract terms and dependencies on the other party’s performance. But smart contracts also have a downside: deliberate ambiguity in a contract is not possible. So, clauses involving terms like “bona fide”, “using best efforts” or “to the extent possible” can not be implemented as code, and can therefore not be part of a smart contract.

The most pertinent issue for lawyers will be aligning the legal layer (i.e. the agreement of the parties involved) with the technical layer (i.e. the computer code breaking down certain parts of the agreement as logic if-then statements). If these two layers are not aligned properly, a smart contract might generate more legal issues than it aims at solving.

Source:

• Expert’s opinion