Alex’s computer. The contract verifies that the download has taken place and
completes the transaction without any further action from the parties.
In this example, there is no dispute resolution or enforcement as such, let
alone a dispute. Neither does this scenario direct future behaviour of the parties
or participants as was the case with example C, coaxing compliance through user
reviews. However, there is an element of conflict prevention here, as the
automated contract instrument does not enable the withholding of funds or
other fraudulent behaviour. The example depicts a method of completing contracts that self-execute contractual obligations without relying on the parties to
trust each other in order to do business. Trust is allocated to the technological
infrastructure, not to the authority of the courts, the expertise of the arbitration
tribunal or ICANN, nor to the binding or non-binding sanction mechanisms of
e-commerce intermediaries. Although the challenges and potential of self-executing contracts deserve more thorough examination later on, at this point it suffices
to draw attention to the private nature of this application of conflict prevention.
New chapter in private governance?
The use of digital technology, together with emerging behavioural models of
Internet users, has contributed to the emergence of new enforcement mechanisms.
Some of these mechanisms make use of existing structures in new situations
(chargebacks), some are more or less new (ICANN, direct enforcement on
platforms). Some alternatives to enforcement highlight conflict prevention (reputational systems) and in some prevention and resolution coincide (smart contracts).
These examples portray enforcement as a complex phenomenon that cannot be
reduced to court-oriented debt recovery.
Traditional models of enforcement through courts and arbitration proceedings
co-exist with contractual models such as chargebacks and direct enforcement of
e-commerce platforms. Distinctions between the original contract, contractual
obligations, the resolution of a dispute rising from the transaction, and the
enforcement of the decision reached in the dispute resolution are no longer
definitive. The boundaries between dispute resolution and conflict prevention are
dissolving. Also, the demarcation between contractual arrangements and dispute
resolution is becoming more ambiguous.
Chargebacks, private enforcement of e-commerce sites, direct enforcement of
ICANN, and self-executing smart contracts all bypass the nation-state’s monopoly
on violence, as private or internal mechanisms for forcing compliance are sufficient
by themselves and do not require an interface to public enforcement. At the same
time, however, these models of enforcement challenge the state’s traditional
monopoly on violence. From this perspective, it is not relevant whether the
expansion of private regimes to enforcement is a part of a deliberate neo-liberal
agenda,
28 or simply an organically evolved solution for situations where public
governance models have not yet been able to provide enforcement measures.
Of course, private governance existed before the emergence of the Internet.
For instance, American legal scholar Lisa Bernstein has examined private regimes
Introduction 13
completes the transaction without any further action from the parties.
In this example, there is no dispute resolution or enforcement as such, let
alone a dispute. Neither does this scenario direct future behaviour of the parties
or participants as was the case with example C, coaxing compliance through user
reviews. However, there is an element of conflict prevention here, as the
automated contract instrument does not enable the withholding of funds or
other fraudulent behaviour. The example depicts a method of completing contracts that self-execute contractual obligations without relying on the parties to
trust each other in order to do business. Trust is allocated to the technological
infrastructure, not to the authority of the courts, the expertise of the arbitration
tribunal or ICANN, nor to the binding or non-binding sanction mechanisms of
e-commerce intermediaries. Although the challenges and potential of self-executing contracts deserve more thorough examination later on, at this point it suffices
to draw attention to the private nature of this application of conflict prevention.
New chapter in private governance?
The use of digital technology, together with emerging behavioural models of
Internet users, has contributed to the emergence of new enforcement mechanisms.
Some of these mechanisms make use of existing structures in new situations
(chargebacks), some are more or less new (ICANN, direct enforcement on
platforms). Some alternatives to enforcement highlight conflict prevention (reputational systems) and in some prevention and resolution coincide (smart contracts).
These examples portray enforcement as a complex phenomenon that cannot be
reduced to court-oriented debt recovery.
Traditional models of enforcement through courts and arbitration proceedings
co-exist with contractual models such as chargebacks and direct enforcement of
e-commerce platforms. Distinctions between the original contract, contractual
obligations, the resolution of a dispute rising from the transaction, and the
enforcement of the decision reached in the dispute resolution are no longer
definitive. The boundaries between dispute resolution and conflict prevention are
dissolving. Also, the demarcation between contractual arrangements and dispute
resolution is becoming more ambiguous.
Chargebacks, private enforcement of e-commerce sites, direct enforcement of
ICANN, and self-executing smart contracts all bypass the nation-state’s monopoly
on violence, as private or internal mechanisms for forcing compliance are sufficient
by themselves and do not require an interface to public enforcement. At the same
time, however, these models of enforcement challenge the state’s traditional
monopoly on violence. From this perspective, it is not relevant whether the
expansion of private regimes to enforcement is a part of a deliberate neo-liberal
agenda,
28 or simply an organically evolved solution for situations where public
governance models have not yet been able to provide enforcement measures.
Of course, private governance existed before the emergence of the Internet.
For instance, American legal scholar Lisa Bernstein has examined private regimes
Introduction 13