The amount of material on smart contracts is growing as rapidly as the excitement about their use in legal contexts.
The use of "contract" seems to be highly confusing to many, -specially in the legal field where the law of contracts has a fairly specific meaning.
A smart contract is a computerized transaction protocol that executes the terms of a contract.
While Szabo does expand upon his vision of what 'smart contracts" can do,
Smart contracts reference that property in a dynamic, often proactively enforced form, and provide much better observation and verification where proactive measures must fall short.
we think the safest implementation is to retain the original description: a "smart contract" is a piece of code that facilitates execution of, or actually executes, an agreement between two computers.
To what extent can "smart contracts" be subject to copyright or patent protection/ To what extent should they be, -if the goal is to problem solve along on a distribtued public ledger?
One analogy that might help (and in keeping with the medieval language often used in this domain), we can think of the legend of the "sword in the stone." As the story goes, Excalibur, the sword of kings, was magically encased in a stone holder, unable to be drawn by anyone by its rightful owner.
The transfereee would not known his worthiness until he tried,-so anyone could try without affecting value in any way.
The players in the game include:
The contract that regulates the bequest can be described quite simply:
Through the agency of magic, you will be able to extract the sword from this stone, if and only if, you are my rightful heir.
It is perfectly transparent, irrevocable, uniquely suited to purpose and error-free.
The magic has one job and it obeys it's internal rules with integrity.
Ideally, "smart contracts" should have similar attributes: they should provide transparent, impregnable executions of transferor intent, without the need for external audit.
Smart contracts are tools we lawyers can use to facilitate the automatic, audit-free execution of transferor intent.
UPDATE: Here is a piece "Explainer | Smart Contracts" by Eris Industries providing far more in-depth discussion.
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