Smart contracts

Current project status

  • Initiation: Could include discussing scope and terms of reference with lead Government Department
  • Pre-consultation: Could include approaching interest groups and specialists, producing scoping and issues papers, finalising terms of project
  • Consultation: Likely to include consultation events and paper, making provisional proposals for comment
  • Policy development: Will include analysis of consultation responses. Could include further issues papers and consultation on draft Bill
  • Reported: Usually recommendations for law reform but can be advice to government, scoping report or other recommendations

Making sure the law is suitable for blockchain legal contracts to be executed automatically. This project is ongoing.

The problem

There has been much press coverage recently in relation to the use of “smart contracts”, particularly in the financial services world. By “smart contracts” we refer to the technology which runs on blockchain and by which legal contracts may be executed automatically, at least in part.

The use of smart contracts to execute legal contracts is expected to increase efficiency in business transactions and it is suggested that the use of blockchain technology will increase trust and certainty.

The project

It is important to ensure that English courts and law remain a competitive choice for business. Therefore, there is a compelling case for a Law Commission scoping study to review the current English legal framework as it applies to smart contracts.

The purpose of this project would be to ensure that the law is sufficiently certain and flexible to apply in a global, digital context and to highlight any topics which lack clarity or certainty.

For example, historical data recorded in blockchains cannot be easily erased or rewritten. Although this is usually presented as an advantageous feature of blockchain, it also means that it may be difficult for a third-party arbiter (such as a court) to correct any perceived mistakes, or unfairness.

There are questions about how this feature would interact with contract law concepts such as implied terms, or contracts which are held to have been void from the outset. There are also questions about interpretation, liability, applicable law and dispute resolution.

Next steps

We have now started work on this project, which will produce a scoping study.

If you would like to be kept up-to-date with this project, please email us at

Project details

Area of law

Commercial and common law


Stephen Lewis