With regard to smart contracts, all methods can be divided into two categories: traditional and non-traditional.

To the traditional methods of resolving disputes can be attributed all those methods that are applicable to conventional legal contracts. These include negotiations, claims procedure, alternative methods of dispute resolution (mediation and arbitration) and judicial proceedings.

To non-traditional methods are referred those methods of resolving disputes that are not applicable to traditional legal contracts. These include, for example, automatic resolution of disputes between the parties. Its essence lies in the fact that the parties determine in advance, within the limits of what amount they are ready to bear responsibility, including the approximate amount of possible losses, missed profits, etc.

After that they conclude a smart contract, while simultaneously depositing the above amount on the address (account) of the smart contract. In the future, in case of circumstances that indicate a violation of the terms of the contract, money will be transferred from the account of the smart contract to the party that is indicated as the recipient of funds (or mediator/agent/arbitrary) in such a case.

If the program/system incorrectly determine the initial intentions of the parties or, for example, one of the parties will not agree with the write-off of funds or the amount of these write-offs, the parties will have to negotiate using traditional methods for resolving disputes, and if the parties can not come to an agreement, they can file a claim to the court.

Please check Article 1210 and 1211 of the Civil Code of the Russian Federation, or Section “Who bears final responsibility/liability in case something goes wrong? The party using the smart contract? The party that wrote the smart contract? Or the blockchain platform?” above.

Sources

• the Civil Code of the Russian Federation, Articles 1210 and 1211