The Unidroit Principles and the inflexibility of code as law: reconciling smart contracts with general clauses

Abstract

Abstract Smart contracts are a set of digital technologies enabling the automation of certain aspects of contractual performance and/or remedies. These technologies follow a deterministic, if/then logic that is often difficult to reconcile with the inherent malleability of contract law. This article scrutinizes this tension, with specific reference to the International Institute for the Unification of Private Law’s (Unidroit) Principles of International Commercial Contracts (PICC). The article argues that some recurring PICC general clauses (such as good faith and reasonableness) play a crucial role in ensuring fairness. Therefore, their operation should not be constrained by smart contracts. To the contrary, the parties to an international commercial contract should use technology to empower arbitrators to make full use of the flexibility inherent to the PICC and issue (partially) self-enforcing awards.