There has been no law on smart contract liability, but precedents from the Electronic Transactions Act exist which may steer the direction of smart contract regulation in Singapore.

In Part VI Section 26, the liability of network service providers for the contents of messages/contracts sent across their services were limited. The law states that “network service providers shall not be subject to any civil or criminal liability under any rule of law in respect of third-party material in the form of electronic records to which he merely provides access if such liability is founded on” only the content of the messages. This is a clear precedent for the clause that blockchain network and operators would not be held liable if something goes wrong with a smart contract, only the counterparties involved.

It is unclear whether the smart contract designer would also suffer some liability. This is an issue that is still yet to be decided in courts and guidance. (The author believes that if the rules of the smart contract are clear and explicit to all parties, and all parties agree to said rules, and those rules are indeed the rules that get executed, then the smart contract designer’s liability would be small at most).

For reference, it is worth referring to current Singapore laws regarding breach of contracts dispute arbitration, for example, as explained here, because at least in the short run smart contracts will likely be legally considered in the same way as other electronic contracts.

Sources:

• Electronic Transactions Act