A Legal Framework for Using Smart Contracts in Consumer Contracts: Machines as Servants, Not Masters

Abstract

Smart contracts, as a newly developed technology, may radically re‐shape traditional contractual relationships, transferring the power to perform and enforce from contractors to robots. This paper provides a framework which seeks to ensure that this transfer of power does not undermine vital consumer law values. The starting point is the well‐accepted idea of consumer law being based on values aiming to protect consumers as weaker parties in their relationships with traders and this will be built on using various new arguments. First it will be argued that any brave new world of smart contracts will still need the law to provide the sorts of rights it already does: smart contracts may enhance data preferences and improve choice up to a point, but they cannot produce market choices replacing the need for such legally mandated rights. Next it will be shown that to reflect underpinning protection values, some such rights must operate in particular ways. This includes rights concerning information and contract cancellation, conformity standards, remedies, and unfair terms: ‘time sensitive’ rights that must be available at certain stages of the relationship.