Blockchain: The Future of Contracting and its Legal Enforcement

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According to the Gartner 2018 State of the Legal Function Survey, 43% of the companies surveyed expected to increase their expenditure on Legal IT Systems or Software by 10% or more over the following three years. This next step in business technology has been taken seriously by some bigger companies with recent developments occurring to support the focus of streamlining various business processes using Blockchain technology.

In business, one often finds that certain types of documents are regularly re-used, for example, Letters of Demand or Contracts.  The difference with each document would relate to their substance and not form, and this would require a System to allow for the input of variable particulars such as client details or addresses.

An example of this would be Blockchain technology which has recently created new avenues for not only investment but business as well. Blockchain involves using code to construct certain provisions which can be edited and securely accessed by the parties involved.

In February 2019, reports have suggested that social-media giants Facebook has involved itself with this System by acquiring a blockchain firm called Chainspace, who specialises in smart contracts. Founder Mark Zuckerberg has stated that he intends to make blockchain research a priority of his and this move will most likely lead to more Software being developed in the area.

The Commerce Committee of the Connecticut General Assembly in the United States of America has this March, also filed a bill to validify the use of blockchain contracts in the state. Although not covering the South African jurisdiction, this move shows the intent of foreign law-making structures to expressly recognise the System which shows it’s influence and potential so far.

Blockchain systems are being developed at a rapid rate, and with these recent movements recognising its adoption by more prominent institutions it will undoubtedly continue to make headlines in future.

 

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