California businesses fall under the jurisdiction of the 2000 Federal Electronic Signatures in Global and National Commerce Act (“E-Sign Act”), which recognizes electronic signatures, contracts, and records with the same legal weight as paper ones. This act may sufficient legal weight for smart contracts to be enforced under the existing law. (source)
In addition California has adopted the Uniform Electronic Transactions Act (UETA) in 1999, which validates electronic signatures and contracts under state law. The Uniform Electronic Transactions Act allows for contracts to be formed by automated transactions. (For example, see comment (2) on pg.7 of the UETA) It states that “A contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation.” (UETA, pg 26)
In Section 14 of the UETA on Automated Transactions, it is provided that
In the comments to section 2 of the UETA, it is noted that “While this Act proceeds on the paradigm that an electronic agent is capable of performing only within the technical strictures of its preset programming, it is conceivable that, within the useful life of this Act, electronic agents may be created with the ability to act autonomously, and not just automatically. That is, through developments in artificial intelligence, a computer may be able to ‘learn through experience, modify the instructions in their own programs, and even devise new instructions’… If such developments occur, courts may construe the definition of electronic agent accordingly, in order to recognize such new capabilities.“ (UETA, pg 11)
Currently electronic contracts between people or between people and machines acting on their behalf are guaranteed by the UETA, while current guidance has not come about to explicitly clarify the status of smart contracts involving artificial intelligence agents. However, the commentary text of the UETA explicitly notes this as a possibility and seems to to allow for the the possibility of their inclusion under the jurisdiction of the UETA. At this point, it seems probable that such contracts are legally binding in California under the UETA, but we await explicit court guidance on this matter.
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