ISDA: Block Chain Smart Contracts face challenges

nnn(ISDA) Joint London Law Firm Linklaters has released a research note that the practical application of smart contracts is limited because of non-operational terms and subjective The statement is difficult to express with machine-readable code. In addition, even when applied to objective operational contracts, it is important to have a formal and standard description of terms and activities.n
nnTranslated by: Inan
nAccording to a new research report, smart contracts in the near future can only achieve limited real-world applications.n
nThe report was jointly presented by the International Swaps and Derivatives Association (ISDA) and London-based law firm Linklaters to provide a comprehensive overview of smart contracts and distributed accounting techniques. According to the organization’s website, ISDA was established in the 1980s, its members include more than 800 companies.n
nIt specifically states that such contracts for the automatic execution of codes connected to certain conditions can only be used in certain circumstances.n
nThe author of the report said:n
nn”Some of the operational terms in a legal contract can be automated, and other non-operational terms, such as contract management laws, are less likely to be expressed in machine-readable code. Some legal provisions are subjective or need to be explained, The challenge. “n
nnAccording to the report, operational terms refer to more objective legal acts, such as payments on a date that are based on the nature of the work.n
n”In the short term, the implementation of smart contracts is most likely to be related to operational terms, not non-operational terms.”n
nNon-operational terms are more dependent on human interpretation, such as when the law should be applied under certain conditions. The authors of the report said they believe that program-controlled contracts may not be able to explain the subjective subtle differences in human interpretation.n
nThe report states that “for example, if a default event occurs under the ISDA Master Agreement, the non-defaulting party has the right to terminate the ongoing transaction, but based on the business and relationship background, the nature of the breach and other external factors at the time of the incident, May not want to terminate the transaction immediately. “n
nBut even when it comes to operational terms, the authors also recommend a more standardized definition of complex terms and activities before using smart contracts.n
nThe report concludes: “This may require a more formal and standard description of these acts, such as payment and delivery, under the definition of ISDA, so that it can be read by the machine.n

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