While the general employment of smart contracts has seen growing interest lately, its application in the legal domain raised several concerns . One of the main issues is that these contracts are often written in computer code, thus are difficult to understand for the average person: this could undermine their enforceability before national courts . The present work proposes an approach for solving this lack of transparency: we shall compare and employ declarative programming languages that have already proven to bring helpful advantages when writing smart contracts , such as Logical English and LPS, both based on Prolog, as well as domain-specific imperative languages, such as Stipula , that allow for the codification of a smart legal contract both understandable for the average person and readable by the machine. We will give an outline of the interplay between natural language and programming languages, and show how the lack of understanding reflects on the current employment of smart legal contracts. Fundamental to our reasoning will also be the distinction between B2B and B2C contractual relationships, where the EU principles of clarity and understandability of contract terms come into the picture. Moreover, we believe that uncertainty on whether the contract will execute the code as intended by the parties will negatively impact the trust that people place in such technology. We will demonstrate a methodology for writing smart legal contracts in such a way as to improve both the understanding of their contents, by providing a direct transposition in code of the relevant clauses; and the intelligibility of their execution, by implementing the clauses directly, with no further coding required. This shall be done through Logical English, a programming language in which code is represented using a controlled form of the English language. Our intention is to showcase how to build trust in smart legal contracts, moving through a brief literature review of the proposed solutions, following with a demonstration of the drafting of the contract in a computable language understandable by legal experts and citizens alike. We shall utilize a running example to compare the methods we have applied, looking at the advantages, disadvantages and their effect on the overall explainability of the program. To conclude, we shall compare our results with the desired effect on transparency and see how these may help the general goal of bridging natural language and computer code, especially as far as consumer contracts are concerned. We shall test whether it is possible for the consumer to contribute to the execution process, moving from the written text directly to the computable code, thus strengthening the connection between the contracts and the automation. To reach a common standard, and employ this technology in the legal field, it is necessary to link all parties more closely, be they businesses, consumers, or legal professionals, by providing a way for all to communicate directly with the Smart Legal Contract.

Building Trust in Smart Legal Contracts

Alessandro Parenti;Marco Billi
2022

Abstract

While the general employment of smart contracts has seen growing interest lately, its application in the legal domain raised several concerns . One of the main issues is that these contracts are often written in computer code, thus are difficult to understand for the average person: this could undermine their enforceability before national courts . The present work proposes an approach for solving this lack of transparency: we shall compare and employ declarative programming languages that have already proven to bring helpful advantages when writing smart contracts , such as Logical English and LPS, both based on Prolog, as well as domain-specific imperative languages, such as Stipula , that allow for the codification of a smart legal contract both understandable for the average person and readable by the machine. We will give an outline of the interplay between natural language and programming languages, and show how the lack of understanding reflects on the current employment of smart legal contracts. Fundamental to our reasoning will also be the distinction between B2B and B2C contractual relationships, where the EU principles of clarity and understandability of contract terms come into the picture. Moreover, we believe that uncertainty on whether the contract will execute the code as intended by the parties will negatively impact the trust that people place in such technology. We will demonstrate a methodology for writing smart legal contracts in such a way as to improve both the understanding of their contents, by providing a direct transposition in code of the relevant clauses; and the intelligibility of their execution, by implementing the clauses directly, with no further coding required. This shall be done through Logical English, a programming language in which code is represented using a controlled form of the English language. Our intention is to showcase how to build trust in smart legal contracts, moving through a brief literature review of the proposed solutions, following with a demonstration of the drafting of the contract in a computable language understandable by legal experts and citizens alike. We shall utilize a running example to compare the methods we have applied, looking at the advantages, disadvantages and their effect on the overall explainability of the program. To conclude, we shall compare our results with the desired effect on transparency and see how these may help the general goal of bridging natural language and computer code, especially as far as consumer contracts are concerned. We shall test whether it is possible for the consumer to contribute to the execution process, moving from the written text directly to the computable code, thus strengthening the connection between the contracts and the automation. To reach a common standard, and employ this technology in the legal field, it is necessary to link all parties more closely, be they businesses, consumers, or legal professionals, by providing a way for all to communicate directly with the Smart Legal Contract.
2022
Proceedings of the Second Young Digital Law (Junges Digitales Recht) Conference
95
113
Alessandro Parenti, Marco Billi
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11585/908148
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