Smart contracts and blockchain-based electronic records have been announced admissible in court, under the ‘Blockchain Technology Act’ that was officially passed in the US State of Illinois, in which would be a huge stride towards adoption of blockchain in legal domain.
According to the new act, which was proposed by Representative Keith Wheeler, smart contracts are defined as “a contract stored as an electronic record which is verified by the use of a blockchain” and as being legally binding due to their immutable blockchain-based nature.
These contracts have the potential to disintermediate legal processes, thus lowering reliance on lawyers and solicitors who incur huge legal fees and may take a long time to process legal contracts. smart contracts are legally binding due to their immutable blockchain-based nature.
“A smart contract, record, or signature may not be denied legal effect or enforceability solely because a blockchain was used to create, store, or verify the smart contract, record, or signature,” according to the act.
According to the act, written contracts will be replaced with blockchain-based smart contracts or records in some contexts.
“If a law requires a record to be in writing, submission of a blockchain which electronically contains the record satisfies the law,” the act reads.