THE EXTENT TO WHICH COMMON LAW PRINCIPLES AND SHARIA LAW COMPLIANT CONTRACTS ARE COMPATIBLE WITH SMART CONTRACTS

Abstract

Globally, contracts concern the relationship between parties where each party offers to do or not do something in return. Countries and laws have diverged post this basic understanding. The common law of contracts, for example, views itself as a facilitator of economic relationship and hence does not interfere with the adequacy of consideration. On the other hand, Sharia law, prevalent in most of Middle East countries, including Saudi Arabia, sees contract law from a protectionist standpoint. As a result, Sharia law views consideration to determine its adequacy and if in excess, refuses to enforce the contract to that extent. With the advent of technology, these limitations posed by domestic laws may be overshadowed by the self-enforcing smart contracts. Though smart contracts are merely code, they have very limited interaction with the domestic principles. Hence, the aim of this research is to determine a uniform law of contract that can be applied at a global scale and to determine the efficacy of smart contracts to bring forth that change.