Search
Close this search box.
Smart Contracts Roland July 26, 2023
Smart Contracts
Signing a contractual agreement

Smart contracts

Following the objectives of the research project (to use smart contracts to facilitate the transformation of supplier relations from a linear to a more circular way of doing business espousing servitisation as a business model), WP 9 has produced the following 2 documents:

  1. A flexible working document to be used as a model/roadmap to implementing circular values and principles through the servitisation model in Business to Business (B2B) relation and Business to consumer (B2C) relations with a view to maintaining healthy long-term relationships.
    This document does the following:
    • It identifies the most appropriate form of smart contracts for B2B and B2C relations. It has worked within the confines of English and Welsh law but with reference to international sources when relevant.
    • It acts as a guide to professional services in drafting the contract template to be used on a smart contract platform by detailing the many relevant complex legal issues and making proposals:
      • It concerns issues common to both B2B and B2C contracts such as: contractual formation; performance and termination; interpretation of contractual obligations and rights; the impact of unforeseen events and change of circumstances on the contract; modifications (re-negotiation); breaches of contractual obligations and ensuing consequences (remedies); liability for errors/mistakes in the digitalisation process; jurisdiction and law applicable to the contract.
      • It also highlights certain issues specific to business to consumer contracts (B2C) such as General Data Protection Regulation (GDPR) to protect consumers’ privacy and data rights and issues specific to B2B contracts such as Extended Producer Liability (for waste disposition and more).
  2. A document advancing relational contract theory as a potential conceptual framework to embed the servitisation model to support circular relations between suppliers inter se and suppliers and customers.
    This document does the following:
    • It identifies key steps required by suppliers by proposing a more flexible relation (key examples include using Alternative Dispute Resolution (ADR), using flexible contracting techniques to ensure closer collaboration and cooperation, sharing of the risk between the parties etc).

RECOMMENDATIONS FOR THE FUTURE

The research has brought together the practical legal implications of blending the common law of contract (and the more specialised legislative landscape for B2B and B2C contexts) when putting it to work on a smart circular contractual environment.

This has been pioneering work but is still in its infancy stages. The development of both contract creation and interpretation when applied to this kind of matrix (smart, circular) therefore still need to be distinctly unpacked and examined iteration by iteration. Further projects of this kind (interdisplinary and business-led) are therefore crucial to the development of the law in the direction that is required in terms of sustainability requirements and is suitable to businesses.

The authors will continue to publish papers (currently two are in preparation) and discuss the merits of the project and continue to disseminate the learning in their respective institutions and beyond. The authors will also continue to seek out further funding to continue researching into areas that, with the already acquired understanding, can be deepened so as to be more relevant to the business environment, by shifting the contractual framework to better support and bolster circular values.

The authors envisage, as examples (not exhaustive), the following areas where further development/collaboration would help this shift:

  • Extended Producer Liability as there is still considerable uncertainty as certain definitions and practical implication of its implementation in circular as well as linear environments require further study.
  • The Alternative Dispute Resolution landscape is particularly suitable to servitisation models as it is more conciliatory and cooperative at its core. However, more research is needed to ensure that it facilitates smart contracting environments and studying its implications in immutable environments. In addition, the digital ADR solutions are not fully mature and require further exploration.
  • The current legislative and contractual framework applicable to businesses in their relations (both B2B and B2C) is sufficiently flexible to support servitisation models. However, their application to the leasing environment, as envisaged for circular models, still require attention. A particular area is that of property.