Blockchain gave rise to the concept of a smart contract; a legal agreement enshrined and automated in computer code. While the automation associated with smart contracts has proceeded, legal standards supporting that automation have lagged behind.
IBM has joined the Accord Project to address this problem head on and foster development of legal standards for smart contracts.
The mission of the Accord Project is to establish open source techno-legal standards to facilitate the widespread adoption of smart legal contracts. The project has developed a blockchain agnostic middleware layer that is interoperable with any distributed ledger, allowing smart legal contracts to operate both on-chain and off-chain. Established last year by legal-tech startup Clause, the Accord Project counts leading international law firms, standards bodies and technology organizations, amongst its collaborators.
While blockchain has given rise to the concept of automated smart contracts, legal standards have been slow to emerge. Clause’s sample application leverages open source technology including Hyperledger Composer, Hyperledger Fabric and the Accord Project Cicero.
Through the Perishable Goods sample, users are able to transact assets between participants while ensuring they comply with legal smart contracts on the Clause platform off-chain. This keeps the contracts confidential while the transactions are shared on the distributed ledger.
Dan Selman, Clause CTO said, “We are thrilled that IBM is partnering with Clause and joining the Accord Project to support the development of smart legal contracts and Open Source code and standards. IBM’s experience in contributing to building Hyperledger Fabric and operating IBM Blockchain Platform will be invaluable to ensuring that smart legal contracts fulfill their potential to radically improve the efficiency of leading industry consortia and enterprises.”
For example, the Accord Project’s smart legal contract templating system and execution engine contains open source code that enables legal contracts for the supply of perishable goods to automatically detect compliance with temperature and humidity obligations. The partnership will seek to integrate smart perishable goods contracts and similar agreements with the business networks enabled by IBM Blockchain.
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