New Information Technologies Could Spark a Revolution in Contract Law
The HSE International Laboratory for Information Technology and Intellectual Property Law has conducted an International Summer School on Cyber Law (ISSC). One key topic was how blockchain technology influences traditional contract law.
Who took part?
The first meeting of the School attracted young researchers from Great Britain, the Netherlands, Brazil, Poland, the Czech Republic, Ukraine, Belarus, and Japan. They discussed conventional problems such as protecting personal data online, protecting copyright and patent rights, and some legal aspects relating to information security in the digital era.
The School programme also included visits to major law firms and IT companies, such as PwC, Yandex, and Google. Their experts gave lectures and organized case studies on topical issues of law in the digital environment. Representatives of IBM, Megafon, and Kaspersky Lab gave master classes on some of the most pressing problems in legal regulation in the IT/IP environment.
What’s new in the Russian practice?
The last summer school discussed problems related to implementing the ‘law on the right to be forgotten’ and requirements regarding the localization of personal data. Participants of this latest summer school agreed that Russian IT businesses have survived this period of adjustment to the new requirements, although they experienced certain differences. Many companies were able to compromise and find both technical and organizational solutions, ensuring they would not involve impassable barriers for online business.
However, Russia’s new set of antiterrorist amendments will add to the problems facing the IT industry. The telecommunications industry may stand to suffer the most from them, since the operators will be obliged to store data not only on communications, but also the message contents. This responsibility will add to the costs considerably.
This also limits the civil right to privacy and secrecy of communication. But this argument isn’t always accepted, so operators must focus not on the legal, but on the practical and economic consequences of such solutions.
Why contract law is expecting a revolution
A lecture entitled ‘Contract law 2.0. Will Smart Contract make obsolete classic contract law in the future?’ by Alexander Savelyev, senior research fellow at the HSE International Laboratory for Information Technology and Intellectual Property Law and legal advisor at IBMintroduced a brand new topic to the School.
He looked at how blockchain technologies (robotizing and unifying the contracting processes through mathematical algorithms) will influence traditional contract law. Blockchain technologies are expected to see transactions implemented and obligations performed ultimately and irreversibly.
But laws, in a legal sense, are not as unified and mandatory as their mathematical counterparts. Real life may involve situations that see obligations litigated and canceled. The key question that school participants were trying to solve was how to ensure the co-existence of ‘smart contracts’ based on blockchain technology and working methods of legal protection in contract law, in one legal system.
Some participants suggested the legal presumption of priority for ‘smart contracts’, and others suggested including options for cancelling obligations according to judicial orders in ‘smart contracts’ algorithms. Other alternatives were also put forward. Nevertheless, the discussion revealed that all these approaches had their shortcomings. It was obvious that new technologies can potentially cause a revolution in contract law. One conclusion was clear: lawyers are facing new challenges, which will need some effective solutions in the near future.
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