The definition of a ‘smart contract’ and whether a smart contract is legally binding (even if both parties agree to use a smart contract)
“Smart contract” has not yet been defined in the Cayman Islands Legal system.
However, according to the Electronic Transactions Law (2003 Revision) Part II Legal Requirements respecting Electronic Records (Legal recognition of electronic record) 6 “Information shall not be denied legal effect or validity on the ground that it is (a) in the form of electronic record; or (b) referred, but not contained in an electronic record. This means that information, documents and contracts (including smart contracts or any provision thereof) shall not be denied legal effector validity solely because it is in electronic form. Similarly, evidence of a contract (or provision thereof) shall not be denied admissibility solely because it is in electronic form and electronic signatures are also expressly permitted.
The effect of the Law is that it provides a lot of latitude for new technologies meaning that new legislation should not be necessary to enable new products and services to be developed.
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