>They are trading one legal authority for another, and this is agreed upon up front. Both parties agree that the code is the legal authority before entering into a contract, which is much different from evading authority after the fact.
The parties might "agree", but who cares? If they are in the US, for example, and the two parties have a smart contract that breaks US contract law, one of the parties can file a lawsuit and attempt to get their money back. You can't go to the judge and say "sorry, the code is the legal authority here".
Yeah I agree with that. Once the contract has executed, enforcement actions can certainly happen in meatspace. But do you not see the difference between:
1. A normal contract (legal or illegal) that requires outside enforcement in the first place to force parties to comply.
2. A smart contract (legal or illegal) that executes itself without outside enforcement and can be overturned later (not literally overturned, but a subsequent transaction can be forced) by meatspace mechanisms
The vast majority of contracts in (1) does not need enforcing, because it is in both parties interest (at least long-term) to perform. Yes, there is implicit enforcement to some extent, but then "non-society" which don't even have that are not pretty places to be.
On (2), sure we can find ways to have the execution fail. In fact, anything where there is not fully escrowed payment/collateral/etc. can fail to execute properly if the other side does have not what it needs to deliver/or does not make it available on chain.
> The vast majority of contracts in (1) does not need enforcing
Of course, people are very careful prior to entering those contracts, because they know how big of a headache it will be if enforcement is needed!
> In fact, anything where there is not fully escrowed payment/collateral/etc. can fail to execute properly if the other side does have not what it needs to deliver/or does not make it available on chain.
Well, sure, if you write a contract that makes it possible for one side not to pay up, then that might happen. Having software run escrow is basically the whole point..
Most contracts are so basic as to be invisible, so no, people are not very careful when they buy a chocolate bar, for example
If you want smart contracts to be only applicable to very narrow sets of problems so be it, but otherwise you need to be able to allow, for example, unsecured lending and highly uncertain payoffs at T0 (staying in the finance domain)
> people are not very careful when they buy a chocolate bar
Ok..sure, but I think it's sort of pedantic to bring up a class of contract that, obviously, nobody in this thread is talking about. It's a bad example anyway; even if you are being pretty careful it's simply not a risky transaction and therefor out of scope for complicated enforcement mechanisms like smart contracts.
I don't think smart contracts are very well suited to unsecured lending, at least not with available software. There would be no incentive to pay it back without some mechanism to force collections. Collateralized loans, however, is a great use case that exists already.
This is early stage tech, the scope is pretty small. I don't think anybody is arguing the contrary.
Freedom of contract is pretty well respected in the US, there are very few exceptions where carve outs are made where people are not allowed to contract freely. So its not clear what a “smart contract that breaks US contract law would be”, its much more likely for a smart contract to be a outright scam or illegal though, in which case good luck finding the funds or whom to sue.
The parties might "agree", but who cares? If they are in the US, for example, and the two parties have a smart contract that breaks US contract law, one of the parties can file a lawsuit and attempt to get their money back. You can't go to the judge and say "sorry, the code is the legal authority here".