Smart contracts are a relatively new technology that is becoming increasingly popular in the world of business and finance. These contracts are “self-executing,” meaning that they automatically execute when certain conditions are met.
While some argue that this technology has the potential to revolutionize the way that contracts are executed, I don’t agree with the wild speculation that it may eventually replace lawyers.
In this blog post, I’ll explore this idea in more detail.
What are smart contracts?
Before we dive into the topic of smart contracts putting lawyers like me out of a job, let’s first define what smart contracts are.
A smart contract is a computer program that automatically executes the terms of a contract when certain predetermined conditions are met. The terms of the contract are encoded into the software, and the contract is self-executing.
Smart contracts are built on blockchain technology, which helps to ensure that the terms of the contract cannot be tampered with.
Smart contracts seem to be more commonly used in the world of finance, but proponents argue that they have potential applications in a variety of industries, including healthcare, real estate, and supply chain management.
Can smart contracts replace lawyers?
While smart contracts have the potential to revolutionize certain ways that contracts are executed in certain situations, it is unlikely that they will replace lawyers entirely. Here are a few reasons why:
Smart contracts can only execute predetermined conditions
Smart contracts are great for executing straightforward contracts where the terms are clear-cut and easy to define. However, when contracts become more complex and involve more nuanced legal issues, it is likely that a human lawyer will still be needed to interpret and advise on the terms of the contract.
Smart contracts cannot provide legal advice
Smart contracts can execute the terms of a contract, but they cannot provide legal advice or representation. Lawyers are trained to provide legal advice and represent their clients in court, which is something that smart contracts cannot do.
Smart contracts cannot handle disputes
If a dispute arises between the parties to a contract, a smart contract cannot handle the dispute. It may be necessary to go to court to resolve the dispute, which is something that only a lawyer can handle.
Smart contracts require a high level of technical knowledge
Smart contracts are built on blockchain technology, which requires a high level of technical knowledge to understand and work with. Not all parties to a contract may have the technical knowledge necessary to work with smart contracts, which means that a lawyer may still be needed to assist with the process.
Overall, while smart contracts have the potential to revolutionize the way that contracts are executed, it is unlikely that they will replace lawyers entirely. Smart contracts are a tool that can be used in conjunction with lawyers to streamline the contract execution process, but they cannot replace the valuable legal advice and representation that lawyers provide.
What are the advantages of using smart contracts?
While smart contracts may not replace lawyers entirely, they do have some advantages that make them an attractive option for some businesses. Here are a few advantages of using smart contracts:
Smart contracts are more efficient in many ways
Smart contracts are self-executing, which means that they can execute the terms of a contract automatically without the need for human intervention. This makes the contract execution process much more efficient (when it fits the situation, of course).
Smart contracts are probably more “secure” than traditional contracts
Smart contracts are built on blockchain technology, which ensures that the terms of the contract cannot be tampered with. This makes them more secure than traditional paper contracts, which can be easily lost or damaged. Believe me, I’ve had lots of clients who just can’t seem to find the executed version of a contract!
Smart contracts are transparent
Because smart contracts are built on blockchain technology, the terms of the contract are transparent and visible to all parties involved. This can help to prevent disputes and ensure that all parties are on the same page. However, given confidentiality concerns, it’s definitely not something that you want to use for every kind of transaction (including most of the transactions I work with on game development projects, honestly).
They can be more cost-effective
Because smart contracts are self-executing, they can reduce the need for human intervention in the contract execution process. This can help to reduce costs and make the process more economical, though there’s something to be said for having a good template created and having the ability to quickly iterate on that at no or low-cost.
Overall, I think that so-called “smart contracts” are very situational in their usefulness. For your average game development project, I just don’t see the purpose – there’s too many creative decisions, confidentiality requirements, and other aspects that aren’t binary in these agreements that a smart contract doesn’t fit the bill.
If you need help with any game dev contract needs, feel free to contact me!