Staring at the Sun
Today, I learned that smart contracts are designed by smart lawyers.
I've been recently reviewing a couple of contracts related to work, both of which were created by companies whose revenue is in the hundreds of million. I've also been reading up on Contract Law, as I bought a used few books on the subject when I was meandering around the Harvard Campus while in Boston . And I'm finding it very interesting to see what the books prescribe, and what the contracts implement.
For example, the books speak about ensuring that proper consideration is being offered by both sides, and that it is sufficient. Consideration is a pretty cool concept... Basically, the way I understand it, it is what each side is leveraging to bonify the contract. Both sides need to show that they are offering something so that there can be a proper "bargain". Apparently, there are all kinds of issues that can pop up here: is there really consideration? (ex. you cannot force someone to sign a new NDA in the process of work: the employer cannot offer as consideration "choosing not to fire the employee") Is the consideration sufficient? (there is apparently some argument about whether giving $1 is proper consideration as it seems to be "nominal")...
How do the contracts deal with this? By expliciting stating exactly what the consideration is, and attesting that the signer, through the act of signing, confirms that consideration is sufficient.
Or, my favourite, warranty. There are all kinds of warranties that pop up all over the place. Even some that are called implicit warranties, which are assurances that are implied in the sale of a product. These relate to some things that might seem obvious, like fitness for a particular purpose (i.e. when you buy a product for a specific and ackowledged purpose, it will accomplish this purpose) or habitability (i.e. a house rented or bought is actually fit to be lived in.) And there seems to be a lot in my book related to figuring out which warranties are in effect, and to what extent the seller is liable for his or her product.
What do the contracts do? They deny everything. Everything! They deny merchantibility (is the product doing what it is expected to?), they deny fitness for a particular purpose, they even seem to deny their contractual and legal obligations in a waiver, and stick in a whole other paragraph specifically limiting all forms of damage regardless of the breach. It's pretty intensive stuff.
Beyond what I've read, some of these other terms scare the shit out of me. It's pretty frickin' intense. My next reading session will probably involve unconscionability (the limitation of enforcement based on the presence of specific forces that pressure a party into signing) and express warranty (a warranty granted by express representation by the seller.) I'm really enjoying reading about Law... it definitely appeals to another, though equally geeky part of me.