otherwise, and at the same time, provides for encryption of all information so that the
transaction is adequately safeguarded.
20 Hence the term “smart contract”.
Even so, despite all its perceived advantages and benefits, it is submitted that a
smart contract is surely not a contract in the legal sense to which rules of contract law
can be applied even in basic terms. Rather, it is simply a facilitating device or one
which provides improved efficiency for the performance of the terms as they may
appear in a traditional contractual instrument. At any rate, whether or not whether the
appellation “smart contracts” is plausible or even justifiable, is debatable. Needless
to say, the use of the term “contract” in that phrase inevitably points to the traditional
associated legal concepts of offer and acceptance, certainty and consideration,
without which there can be no contract recognizable at law. These do not appear
to be of any relevance to coded computer programs. Consequently, it attracts the
question of application of traditional contract law over smart contracts. While the
term “smart contract” is arguably a misnomer, another piece of jargon at best,
incompatible with any notion of a contract in the traditional legal sense, it is
conceded that the device enables a smoother and faster transaction saving time and
costs together with the added dimensions of safety, security and certainty.
Blockchain technology provides the natural platform for the operation of smart
contracts which simply comprise computer codes. A smart contract is in essence a
program that is event-driven and operates on top of a replicated, shared ledger
capable of assuming custody over assets appearing on it. In the context of bills of
lading, the bill as a token on the blockchain would be the smart contract under which
goods are carried by sea. A smart bill of lading can be used to render automatic
implementation or performance of a paper bill of lading.
21 This assertion leads us
into the discussion below.
4 Blockchain, Smart Contracts and Bills of Lading
Innovative prowess among those in the know can well lead to the invention of a
digital record system for bills of lading which can self-check and identify discrepancies that may arise.
22 Among the anticipated advantages that such a development
can produce is a streamlining of the outcomes of its functions. For example, the
negotiability function of the traditional bill of lading is germane to sea-borne
commerce. But documentation in shipping generally, remains voluminous and
cumbersome consisting of multiple bills of lading, letters of credit, contracts of
sale and charter parties.
Given multifarious payment procedures combined with transmission of documents among numerous parties, it is ostensibly uncertain that paper bills of lading
20 Xuereb (2018).
21 Lin (2017).
22 Warner (2017).
420
H. Liu
transaction is adequately safeguarded.
20 Hence the term “smart contract”.
Even so, despite all its perceived advantages and benefits, it is submitted that a
smart contract is surely not a contract in the legal sense to which rules of contract law
can be applied even in basic terms. Rather, it is simply a facilitating device or one
which provides improved efficiency for the performance of the terms as they may
appear in a traditional contractual instrument. At any rate, whether or not whether the
appellation “smart contracts” is plausible or even justifiable, is debatable. Needless
to say, the use of the term “contract” in that phrase inevitably points to the traditional
associated legal concepts of offer and acceptance, certainty and consideration,
without which there can be no contract recognizable at law. These do not appear
to be of any relevance to coded computer programs. Consequently, it attracts the
question of application of traditional contract law over smart contracts. While the
term “smart contract” is arguably a misnomer, another piece of jargon at best,
incompatible with any notion of a contract in the traditional legal sense, it is
conceded that the device enables a smoother and faster transaction saving time and
costs together with the added dimensions of safety, security and certainty.
Blockchain technology provides the natural platform for the operation of smart
contracts which simply comprise computer codes. A smart contract is in essence a
program that is event-driven and operates on top of a replicated, shared ledger
capable of assuming custody over assets appearing on it. In the context of bills of
lading, the bill as a token on the blockchain would be the smart contract under which
goods are carried by sea. A smart bill of lading can be used to render automatic
implementation or performance of a paper bill of lading.
21 This assertion leads us
into the discussion below.
4 Blockchain, Smart Contracts and Bills of Lading
Innovative prowess among those in the know can well lead to the invention of a
digital record system for bills of lading which can self-check and identify discrepancies that may arise.
22 Among the anticipated advantages that such a development
can produce is a streamlining of the outcomes of its functions. For example, the
negotiability function of the traditional bill of lading is germane to sea-borne
commerce. But documentation in shipping generally, remains voluminous and
cumbersome consisting of multiple bills of lading, letters of credit, contracts of
sale and charter parties.
Given multifarious payment procedures combined with transmission of documents among numerous parties, it is ostensibly uncertain that paper bills of lading
20 Xuereb (2018).
21 Lin (2017).
22 Warner (2017).
420
H. Liu