Chile: How is Dispute Resolution Integrated

Although there is no official statement on smart contracts in Chile presently on offer, the Chilean government is currently using smart contracts in a nation-wide energy project. As Chile has not yet defined smart contracts, please keep attuned to ongoing discussions.

As a general note, despite certain advantages of smart contracts, they are not free from disputes arising in relation to their performance. There are several potential types of disputes–a party may, for example, contest whether a smart contract is in fact legally binding, disagree as to which jurisdiction’s law is the governing law, or allege misconduct and seek damages.

It is therefore of central importance that ‘smart contracts’ are anchored within a valid legal framework and that parties identify, at the outset, the applicable dispute resolution mechanism. Given the lack of a central enforcement agency and established precedent, it is difficult to predict with certainty how such issues will be dealt with and resolved. It is therefore advisable that parties include a dispute resolution or arbitration clause when contracting via a smart contract.

Others have suggested that parties to enter into ‘smart agreements’, meaning traditional legal agreements (entered into in compliance with traditional principles of contract formation), which contain one or more clauses that will be executed through smart contracts on the blockchain.

Currently, there are tools in development to address issues of dispute resolution in smart contracts. Juris Protocol, for example, is building a human-powered, blockchain-native, open source dispute resolution protocol. Others, are developing arbitration protocols that parties can include as part of the code of their smart contracts.


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