How does contract law apply to smart contracts? We quite frequently hear about some cryptocurrency company losing money because their software was exploited. From example today we have Qubit losing $80 million: The protocol was exploited by; 0xd01ae1a708614948b2b5e0b7ab5be6afa01325c7 The hacker minted unlimited xETH to borrow on BSC. The team is currently working with security and network partners on next steps. My understanding of what happened is that a smart contract was created by someone, accepted by Qubit and completed according to the rules created by Qubit. However it did not have the result expected by Qubit, though presumably expected by the someone. In general, where there is a difference in the understanding of a contract it is the wording that is held to be valid, rather than either parties understanding. This will be familiar to many people, as companies frequently craft contracts in their interest and people do not read them. In the case of a smart contract, where the actual meaning is in no doubt (as it is executed programmatically) but it is understood to mean something different by one of the parties, it it actually valid? Ie. in such a case would the someone have legal ownership of the $80 million cryptocurrency that they were assigned upon the completion of the smart contract?
In the case of a smart contract ... it it actually valid? The question is based on the misconception that the terms &quot;smart contract&quot; (technical term) and &quot;contract&quot; (legal term) directly relate or have much in common. They don't. If anything, smart contracts are essentially modern replacement for papers and signatures. But paper contracts have never been contracts themselves either. They are merely evidence of the contracts, and this evidence is often not even necessary for the contracts to be valid: most contracts are not even required to be in writing. So, the story in your example is just the 21st century's analogue of good old paper contract foul play like signature forgery, disappearing ink and so on. Legally it is handled with no difference: investigate what happened, find out who intended what and judge what has to be done. Gavel bangs!
The contract remains valid. Most contracts don't need to be written at all. Even if yours did need to be written under the Statute of Frauds or some other law, you're saying that it was made in writing, even though you later tore it up. The fact that the contract is missing or destroyed doesn't change the fact that it exists and obligates the parties; it just makes it harder to prove what it said.
Can Hacker Corp. claim that they acted in good faith, believing that the Permission to Attack was granted by someone from within the company who was allowed to grant such a permission? Unless ACME proves that Hacker knew or should have known that ACME's low-level employee had no authority to make the decision on behalf of ACME, Hacker ought to prevail on the basis that it performed the contract. There is no indication in your description that Hacker targeted other system(s) than the one(s) specified or that it departed from the agreed conditions. Therefore, there is no sign of Hacker breaching the implied covenant of good faith. ACME's evidently poor management (i.e., the turmoil, the delay for signing or denying permission, its low-level employee's opportunity to make sensitive decisions, the company's failure to withdraw the authorization or to take precautions) is not Hacker's fault.
The general principle is that when one party writes a contract, and there is an ambiguity, the ambiguity is interpreted against the interest of the writer (contra proferentem). The case of Hypercheck v. Mutual and Federal Ins. confirms that South African law operates under this doctrine.
The applicable law is the New Zealand Anti-Money Laundering law. The regulations describing exactly what is covered don't mention Bitcoin cleaning, but the "wire transfer" and "currency exchange" bits probably cover such a thing. I certainly wouldn't like to be the test case. There was also this case in Europe.
united-states - cfaa The last person to have control of the AI executed the code in a knowing manner about the risk that the self-replicating program could get itself unauthorised access to computers and disk space that this person has no authorisation to use. Because of how it spread, it is more likely classified as malware. &quot;Creating a botnet&quot; is typically violating the authorisation to use the computers that are part of the botnet. As the last user is responsible for letting his malware free, his act breached these provisions: (a) Whoever— (5) (B) intentionally accesses a protected computer without authorization, and as a result of such conduct, recklessly causes damage; or (C) intentionally accesses a protected computer without authorization, and as a result of such conduct, causes damage and loss. He intentionally let his program free knowing very well that it will spread to computers that are classified as protected. As a result, he will be treated just the same as if he had written and released... ILOVEYOU - however in contrast to that case, the gap of non-applicable laws has been closed more than 20 years ago. Private PCs are off limits for the AI because of that stipulation, but even Webspace can't be gained to save itself to: The problem lies in the fact that authorization to space can only be gained in some sort of agreement between legal entities (companies and humans) - which is a contract. An AI however isn't a legal entity, it is classified as a widget. Widgets are not able to sign contracts on their own, and to gain access to webspace, one usually has to agree to a contract. The contracts the AI tries to sign would thus be void ab initio and have no force. As a result, because the contract for the webspace is void, the access to the webspace is by definition without the required authorization - the contract granting it never existed, so the access is unauthorized. The AI now fills disk space and uses resources in an unauthorized manner, which is damage. As a result, the one who knowingly set the AI free is fully responsible and criminally liable for his AI, should it spread. How far can it legally spread? If the AI is programmed to only act in ways inside the law, it won't leave the owner's system and won't proliferate, as it can't gain access to new space in a legal manner.
We can assume there was a meeting of the minds when the contract was drafted, and both parties expected payments to me made based on product usage. Plaintiff alleges that this did not happen. Thus plaintiff is indeed alleging that the contract was breached. Now plaintiff alleges that defendant broke the contract, while defendant counters that plaintiff broke the contract. "[T]o be determined by tracking software" is woefully ambiguous. The court will want to know which party drafted the contract, as disputes arising from ambiguity are often resolved in favor of the non-drafting party.
Party A has breached the contract Party A had an obligation that it did not fulfil, providing the section-by-section overview of the costs. To the extent that Party B suffered damage from each breach, for example, because Party A owes a refund, Party B can recover that plus interest subject to any statute of limitations on actions for contract breach. To the extent that Party A suffered damage, tough - they don’t get to benefit from their own breach. Party A might wish to argue that Party B has waived their right to adjust the payment but this would be difficult to prove. It doesn’t appear that there is an explicit waiver but neither is their an implied waiver: Party A would need to show that Party B was aware of and condoned the breach in some way. You are right that a contract can be altered after it is entered into and that such a change can be implicit rather than explicit. But that would require showing some action rather than inaction by the parties to effect a different arrangement. In practice, where one party affirms the written contract, without clear and compelling evidence that the contract has subsequently been changed, the written contract will prevail. For an example, Yale University periodically collects the interest due on a perpetual bond originally issued by the Dutch water board Lekdijk Bovendams on 15 May 1624. Originally issued with a principal of &quot;1000 silver Carolus gulders of 20 Stuivers a piece&quot;, as of 2004 the yearly interest payment to the bondholder is set at €11.35 (15€ as of 2018 = 16$). According to its original terms, the bond would pay 5% interest in perpetuity, although the interest rate was reduced to 3.5% and then 2.5% during the 18th century. Providing it is physically presented to the successors of the board (the Dutch Water Authority) interest must be paid even if it has been many decades since the last payment. Of course, practically, crossing the Atlantic to collect 15€ every year is not commercially viable so they do it every decade or so when someone from Yale is going there anyway and then, only for the historical value. So long as the Netherlands continues to exist as a legal entity, this obligation will continue.