Legal Aspects of Smart Contracts in Sustainable Development: Global Challenges

Abstract

Smart contracts, as a digital form of civil contract, offer distinct advantages and risks. This study aims to analyze approaches to defining the legal nature of smart contracts, identify risks associated with the anonymity of participants, and address specific aspects of party liability, particularly regarding judicial protection of their rights. Smart contracts, structured in code and based on transactions executed online, often include participant anonymity due to encrypted data use. While this enhances transaction efficiency and confidentiality, it poses risks, notably in determining participant legal capacity, conflicting with Ukrainian civil law. Anonymity also complicates judicial recourse, as participants may not know the counterparty’s identity. Effective legal protection of smart contract participants is essential for addressing their contractual liability. Given the absence of a comprehensive electronic evidence list and storage locations in Ukrainian legislation, courts should consider blockchain-registered information as valid evidence. General scientific methods, including analysis, synthesis, and comparative and dialectical approaches, were applied. These findings are significant as blockchain technology advances, enhancing the legal framework for smart contracts in Ukraine, and facilitating their broader, more effective international application.