A Comparative Study of the Law Governing Smart Digital Contracts from the Perspective of Private International Law in the Iranian Legal System and the Regulations of Rome I

Abstract

Following the development of new technologies at the beginning of the 21st century, a new generation of self-executing electronic contracts called smart contracts in the field of digital commerce has been developed, which is the product of combining distributed office technology called blockchain with computer code and IoT. Relying on computer algorithms for the accurate and secure execution of smart contracts does not eliminate the need for legal evaluation. The question now is whether conflict resolution rules still apply to smart contracts? This research, which has been done with an analytical approach, has evaluated the existing criteria in private international law intersection with this new technology. A comparative study of Iranian and European Union law (Regulations of Rome I) shows that, although the use of personal criteria in determining the law governing smart contracts directly clarifies the answer if the will of the parties is not exercised at the time of designing of the smart contract’s software, the international dispute resolution body, has to resort to objective criteria. The conclusion is that these criteria are still valid. Still, the effect of objective criteria that are most closely related to the characteristics of this type of contract may, in some cases, lead to different results. Therefore, the method of qualitative evaluation and weighting to effective objective factors is suggested.

Keywords

• smart contracts
• blockchain
• conflict of laws
• objective criteria
• european union