Smart legal contract and its research progress

With the advancement of blockchain, smart contracts have become increasingly popular. However, the uncertain status by law severely limits their practical applications. To address the problem, smart legal contract (SLC) is proposed as a transitional technology between legal and smart contracts. Starting with the basic concept of SLCs, in this paper, we discussed the legalization of smart legal contracts based on the requirements of existing legislation items and highlight that legalization should meet three elementary principles, including the specified grammatical requirements (for regulating terminology and eliminating ambiguity), the principle of nonempowerment (for resolving the inherent contradiction between automatic execution and the rights of parties), and examination criteria (for handling legal validity and code security issues). Moreover, we analyzed SLC’s legal effect by taking typical smart legal contract languages, SPESC and CML as examples, and show that the contract program or chaincode has the same legal effect as the original contract, if and only if they satisfy three necessary conditions: (1) adopting the technical specification for generation and conclusion of SLCs; (2) complying with three abovementioned elementary principles; and (3) agreeing on declaration with the same legal effect. Furthermore, investigating the smart contract architecture and deployment, the legal status of both contract program and compiled chaincode was demonstrated in legal analysis of the deployed smart contract. Last, we discussed and evaluated the current situation of smart legal contract logic models and language models on SLCs. This work shows that the research on smart legal contracts is a suitable approach to guarantee the legal status of smart contracts, and the results will contribute to grasping the future research directions in several fields, such as contract logic, arbitration process, and formal verification, from the existing legislation viewpoint.