Australia is yet to face a case of dispute in the case of smart contracts, and does not have regulations and law that deal particularly with smart contracts. In this case, it is best to assume that dispute resolution may be dealt with in a way similar to in the case of traditional contracts. When a dispute arises under a smart contract, it may be difficult to determine where liability may fall. First, the identity of the authors of a smart contract, particularly in an open source context where multiple parties have modified the code, may not be known or cannot be ascertained. Second, the terms of use surrounding the automated parts of a smart contract are likely to be the subject of extensive written terms seeking to limit liability for the party proposing to use the smart contract in the first instance or to limit the choice of law clause to a jurisdiction most favourable to smart contract interpretation. Third when the smart contract involves a new form of organisation called a ‘Decentralised Autonomous Organisation’ (DAO), there are further identity issues as the very nature of these new organisations is that those involved do not need to identify themselves. The relationship between these individuals within the DAO is also uncertain. While there has been no judicial consideration of just what a DAO is, it may be considered a partnership or joint venture. Inevitably, the authors of a smart contract, usually developers and/or lawyers, will be potential targets for claims if a smart contract executes in an unexpected way or contains a bug which is exploited.

Sources:

• Piper Alderman