Detailed Plan
How can users of smart contracts avoid disputes that give rise to lawsuits? The goal is to create the legal resources developers of smart contract dApps need to offer binding arbitration clauses in both P2P and enterprise level transactions. It is commonly said that code is law when it comes to smart contracts. This is misleading. Most contracts, whether written in natural language or as self-executing code, can give rise to disputes that lead to costly lawsuits.
Solution: The best route to avoid the time, expense and uncertainty associated with lawsuits over smart contracts is writing effective dispute resolution and binding arbitration clauses. We propose to (1) develop educational resources for the Cardano community about the dispute resolution and arbitration process, and (2) create a set of readily available legal templates for binding arbitration clauses that developers can incorporate into their dApps to support users making smart agreements.
Team and Experience:
- Lead: JEFFREY DOWNARD, university professor specializing in law, ethics and logic. PI of collaborative projects to build educational resources, director of crowdsourcing project.
- DAVID WATTS, business systems oriented on the problems of blockchain scalability.
- SARAH HOLCOMB, practicing attorney in business transactions, trusts, estates, taxes, university lecturer in business law
- TOM DIETRICH, practicing attorney in business transactions, contracts, dispute resolution, arbitration, IP.
- Board of Advisors: <https://www.keplerscs.com/our-team-1>
IP:
Open workshop on Zoom in both a live and recorded form. The educational resources will be publicly available via a Youtube channel under copy left permission. The templates will be freely available for developers and dApp users in the Cardano community.
Defining success:
A series of workshops with participants drawn from the legal and developer communities. Integrated video tutorials on the use of provisions for choice of law and jurisdiction and binding arbitration clauses in smart contracts. A set of templates for smart agreements written in both natural language and Plutus.
Timeline and Budget:
Phase 1:
- Months 1-3: Legal Research on choice of law and jurisdiction, dispute resolution and settlement procedures and binding arbitration clauses in smart contracts: ($5,000)
- Months 1-2: Workshop budget: Coordinator, assistant ($2000)
- Months 1-2: Website development and and Youtube channel: ($2000)
- Months 2-4: Creation and editing of an integrated set of video tutorials on the proper use of provisions for choice of law and jurisdiction and binding arbitration clauses in smart contracts. ($2000)
- Months 2-4: Development of templates for smart agreements written in both natural language and a design for a dApp to process the clauses in Plutus and Marlowe: ($10,000)
- Months 2-4: Development of framework for dApp/integration for processing binding arbitration clauses. ($18,000)
- Months 1-4: Project direction: three months ($9,000)
- Months 1-4: Project oversight and evaluation by members of Board of Advisors, 3 months ($7,000)
- Budget Total Phase 1: $55,000
- Months 5-9: transition to Phase 2 of the project to test and implement the binding arbitration dapp
Our team is committed to the effective use of Catalyst funds to achieve the goals of the project and support the larger Cardano community. Towards this end, we are committed to procedural safeguards in the form of oversight by a board of advisors with a wide range of areas of expertise in finance, accounting, startups and IP. The board will provide oversight and auditing functions as a guarantee.
Links:
Resources:
Yann Aouidef, Federico Ast, and Bruno Deffains. "Decentralized Justice: A Comparative Analysis of Blockchain Online Dispute Resolution Projects." Frontiers in Blockchain 4 (2021): 3.
Michael Buchwald, "Smart contract dispute resolution: the inescapable flaws of blockchain-based arbitration." U. Pa. L. Rev. 168 (2019): 1369.
REV. ONLINE 35, 39 (2014), http:// scholarlycommons.law.wlu.edu/wlulr-online/vol71/iss2/3/
Joshua A.T. Fairfield, Smart Contracts, Bitcoin Bots, and Consumer Protection, 71 WASH. & LEE
Reggie O'Shields, Smart Contracts: Legal Agreements for the Blockchain, 21 N.C.BANKING INST. 177, 183 (2017)
Peter Michaelson and Sandra A. Jeskie. "Blockchain and Smart Agreement Disputes Call for Arbitration's Strengths." Alternatives to the High Cost of Litigation 39, no. 6 (2021): 91-94
James Rogers, Harriet Jones-Fenleigh & Adam Sanitt, Arbitrating Smart Contract Disputes, INT'L ARB. REP., Oct. 2017, at 21, 22 ("Many technologists believe that Smart Contracts replace contract law and courts and tribunals with code.")
Daniel Garrie and Judge Gail Andler, Decentralized Finance Made Simple: What Lawyers Need to Know, Tech News, 6/17/2021, <https://www.law.com/legaltechnews/2021/06/17/decentralized-finance-made-simple-what-lawyers-need-to-know/?slreturn=20210718214856>
