Article 2.1.8 Standardised and Smart Contracts

(a) Recognition and Enforceability of Automated and Standard Form Contracts: A contract shall not be denied legal effect, validity, or enforceability solely because it is standardised, electronically formed, or executed through automated means, provided the essential elements of contract formation under this ICT Code are met.

(b) Smart Contracts and Programmatic Performance:

(i) Contracts expressed wholly or partly in code, including smart contracts or similar, may be enforceable provided they:

(ii) Reflect clear and verifiable agreement between the parties;

(iii) Perform contractual functions in accordance with their intended purpose; and

(iv) Allow for evidentiary substantiation of mutual assent and performance.

(v) ICT Courts may look to accompanying documentation, user interfaces, and transaction records to assess the legal intent and content of smart contracts.

(c) Layered Contractual Instruments: Parties may structure contracts using multiple coordinated instruments, including, without limitation, code-based execution layers, legal prose layers, and incorporated protocols or terms hosted on decentralised platforms. In the event of inconsistency or conflict between such layers, precedence shall be determined in accordance with the order of interpretation explicitly agreed between the parties, or, where no such order exists, by reference to the version or layer that most closely reflects the mutual intent, purpose, and risk allocation as objectively ascertainable from the full contractual context.

(d) Interpretation of Programmatic Terms:

(i) Where the terms of a smart or code-based contract or similar are ambiguous or lack natural language equivalents, interpretation shall be guided by:

(ii)  The functional and commercial purpose of the contract;

(iii)  The parties’ course of dealing or usage of trade; and

(iv)  Any parallel written terms, disclosures, or metadata.

(v) In case of discrepancy between the code and a corresponding natural language agreement, the written terms shall prevail unless the code was independently and expressly agreed to as the operative version between the Parties.

(e) Evidentiary Status of Digital Contracts:

(i) Digitally executed agreements, including those concluded through blockchain (or similar or related technologies) or electronic signature systems, shall be presumed authentic and valid unless proven otherwise.

(ii) A party challenging the validity of a digital contract bears the burden of demonstrating fraud, tampering, lack of capacity, or other defect.

(f) Errors and Anomalies in Programmatic Execution:

(i) Where a smart contract or programmatic clause executes contrary to the parties’ mutual understanding due to a code error, ambiguity, or unintended functionality, ICT Courts may determine enforceability based on:

(ii) The original contractual intent of the parties;

(iii) The reasonable expectations of the parties at the time of contracting; and

(iv) Whether the error could have been detected and mitigated using commercially reasonable diligence.

(v) No party shall be permitted to knowingly exploit a coding error or execution flaw to their advantage.

(g) Conflict Between Modalities: In the absence of express agreement to the contrary, where a discrepancy arises between a programmatic execution (e.g. smart contract or similar technology) and accompanying written terms or user interface representations, the version that best reflects the parties’ mutual intent shall prevail.