Citation

Yong, Kai Jie (2025) Recognition, adjudication and enforcement of smart contract codes as contract terms. PhD thesis, Multimedia University.

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Abstract

Contractual terms have always been expressed in natural language, oral or in writing. Yet, with the rise of blockchain-based smart contracts, obligations can now be encoded as computer-readable source code. Critics contend that such code-based terms lack sufficient expressiveness and pose interpretive challenges. These objections underscore the tension in contract law concerning formation, interpretation, and dispute resolution if contracts are expressed in machine-readable codes. The critical question arises whether programming languages can serve as a legitimate means of creating legally binding and enforceable obligations. This study puts forward the thesis statement as follow: smart contracts made up of if/then statements in computer-readable format can qualify as contract terms and constitute a source of obligation, which, when a dispute arises, are capable of being interpreted, adjudicated and enforced through a blockchain platform where the disputed smart contract operates. This thesis statement is accompanied by two research objectives, first, to construct a theory and to ascertain the legal standard in recognising and distinguishing smart contract codes as contract terms; and second, to propose a legal approach to adjudicate disputes and enforce remedies for non-performance in smart contracts. To achieve the first research objective, this thesis uses speech act theory to demonstrate that smart contract code can possess the illocutionary force typically ascribed to promises in natural language, thereby generating rights, duties, powers, and immunities, which is akin to the legal effect of enforcing an agreement. A ‘smart tenancy’ case study is included to highlights how specific functionalities in smart contract codes can commit parties to definite performance—such as rent payments or refunding deposits—mirroring legal obligations typically found in rental agreements, thereby exhibiting the bundle of rights in the Hohfeldian sense similar to those of a written agreement. To distinguish the smart contract codes that create binding contractual terms from those that merely support program logic, the thesis proposes an Event-ConditionAction (ECA) approach to determine the content of the smart contract. By examining how each code snippet triggers actions upon specific conditions, it becomes clearer whether the content of the code satisfies the legal threshold in the contractual sense. To achieve second research objective, this thesis proposes two factors to determine the legal consequences when defects in code lead to unintended or nonperformance. The two factors are—(i) the operational model (internal and external) of the smart contract code and (ii) the final effect (ranging from total failure to third-party hacks) caused by the defects. These two factors guide the doctrinal remedies available under contract law to apply when smart contract codes are defective, including mistake, frustration, or rectification. Smart contracts also function as architectural constraints—in the sense advanced by the New Chicago School—shaping user behaviour more swiftly and effectively than traditional legal sanctions. This suggests that on-chain solutions, like hard forks or on the blockchain arbitration, may sometimes outperform the mechanisms of court enforcement when enforcing remedies. This thesis further contends that, in Malaysia, the enforceability of smart contract codes depends on their admissibility as evidence under local laws. Statutes like the Stamp Act 1949, Electronic Commerce Act 2006, and Digital Signature Act 1997 demand that such agreements be recognised in writing and signed. Where pseudonymous parties rely on cryptographic signatures on a public blockchain and intangible blockchain records, additional reforms or interpretive guidelines may be necessary to ensure these smart contract codes are acceptable within the law. This research demonstrates novelty in establishing legal theory and doctrines accommodating computer-readable contractual terms by providing theoretical justification and practical methods for recognising, adjudicating, and enforcing smart contract codes. By examining Malaysian law on admitting and enforcing contracts, the thesis highlights the legal limitations of using smart contracts to perform obligations and propose ways to mitigate them.

Item Type:	Thesis (PhD)
Additional Information:	Call No.: K845.E44 Y66 2025
Uncontrolled Keywords:	Smart contracts
Subjects:	K Law > K Law (General)
Divisions:	Faculty of Law (FOL)
Depositing User:	Ms Nurul Iqtiani Ahmad
Date Deposited:	22 May 2026 08:46
Last Modified:	22 May 2026 08:46
URII:	http://shdl.mmu.edu.my/id/eprint/15908

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