Our partners Ted Mlynar and Lewis Cohen were quoted in a Wall Street Journal article which covers Hogan Lovell’s thought leadership on blockchain technologies, specifically how to grapple with the practical issues involved in implementing a smart contract.
Ted advocates an integrated approach by transactional counsel with subject matter expertise, smart contract lawyers, and programmers. To demonstrate, he and partner Ira Schaefer created a pilot smart contract for an insurance policy. From a traditional term sheet they created a “smart term sheet,” and then directed the programming of the corresponding smart contract. Execution of the smart contract was tested by associate Tony Biondo on a simulator. Deviations from the initial term sheet, vulnerabilities in the smart contract code, and potential solutions were identified and detailed in separate “deviation” and “vulnerabilities” memoranda.
Lewis stresses the importance of understanding which contractual terms in an agreement can and cannot be coded – and where traditional legal “boilerplate” still has a role to play. Lewis also notes how important dispute resolution and enforcement are when considering smart contracts.
The full Wall Street Journal article is available online at this link (subscription required)