MINISTRY OF JUSTICE MINISTRY OF EDUCATION AND TRAINING TRINH TRI DUC 453036 LEGAL REGULATIONS OF SMART CONTRACT IN THE UNITED STATES AND LESSONS FOR VIETNAM GRADUATION THESIS Hanoi - 2024 MINISTRY OF JUSTICE MINISTRY OF EDUCATION AND TRAINING TRINH TRI DUC 453036 LEGAL REGULATIONS OF SMART CONTRACT IN THE UNITED STATES AND LESSONS FOR VIETNAM Specialization: International Trade Law GRADUATION THESIS THESIS INSTRUCTOR LL.M Tran Thu Yen Hanoi - 2024 3 DECLARATION OF AUTHORSHIP Thereby declare that this is my own research work, and that all conclusions and data presented in the graduation thesis are truthful, enstring reliability./ Signature of thesis instructor Signature of author LLM. Tran Thu Yen Trinh Tri Duc INTRODUCTION. CHAPTER 1: FUNDAMENTALS OF SMART CONTRACT. Definition, general information and practical use of Blochc hain technology 111.
Definition of Blockcham tecÌ:noÌogy. General information of Blockchain technoÌøgy. 1G 113 Working process of Blockchaintechnolagy.4 Constiment of a “block” in a Blockchain system. Some common algorithms in Blockchain technÌegy.-8 116 Disnnet characteristics of Blockchain technology 117 Practical use of Blockchain technology.
Definition, general knowledge, and practical use of Smart contract.1 DWtttiờn Of Smart contrat scsisssssstsssssessesssssnssssssassssssussssansssssicssssstvessecsessivessectaneisesuesseie2O 12. General information of Smart contraet.4 Practical use of Smart contract. Conclusion of Chap ter CHAPTER 2: LAW ON SMART CONTRACT IN THE UNITED STATES. Practical use of smart contract in the United States.
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Conclusion of Chapter 2. CHAPTER 3: LAW ON SMART CONTRACT IN VIETNAM AND LESSONS TAKEN. 58 LL Practical use of smart contract in Vietnam. The legal aspects of smart contract under Vietnamese bw.
Formation of smart contract. Legality of smart contraet. Conditions for asmart contract to be valid.4 The legal consequences when asmart contract is invalidate: 2:3: Other poigtliiilagáalDIOBIENS:s::.:sscccscbikcsbiilidsaiittussiaskubanaidbsaxiodrklgassgaozarcao OS CONCLUSION. LIST OF REFERENCES INTRODUCTION 1.
The necessity of the topic The 21% century has been defined by application of and advancement in information technology, especially since the birth of the Internet. This factor alone has shifted the world completely, which revolutionalized how the modern world works. The Internet, together with computers, have connected all individuals around the globe by just a simple click of a mouse button. Economic development has been influenced by technological advancement as well.
With the advent of the Fourth Industrial Revolution, itis now common to witness transactions of millions of dollars being completed swiftly and effortlessly between two distinct continents without the need of an in-person encounter. This could not have been done without the appearance of several particular technology inventions which have been in the field of interest by everyone around the world They are Artificial Intelligence (or “AI”), Internet of Things (or the “IoT”), Virtual Reality (or “VR’),. and Blockchain AI has made it possible for machines to learn and operate on their own, which has led to a number of amazing breakthroughs in various fields, loT makes it possible to collect and share data on an unprecedented scale by connecting physical objects and devices to the fullest extent; VR allows users to immerse themselves in a computer-generated environment!. While the aforementioned technological innovations are certainly beneficial for the advancement of humanity worldwide, citizens, businesses, and governments - especially those in the United States—are showing a great deal of interest in blockchain and smart contracts.
Blockchain technology is superior in the way that it is anew way of storing data in which transparency, security and cost- efficiency are its major priorities. The United States has integrated blockchain and smart contract in many aspects: from supply chain management, real estate transactions, crytocurrency to healthcare, intellectual property tights or decentralized finance. The Unites States has always been considered one of the leading countries in the process of perfecting its legal system, now on the way to enacting laws and utilizing existing legal resources to govern the use of smart contract, whichis “hitps:/Avvnw thirdstage -c onsuking ¢ om/howy-techmology-has-chunged-anwrica/ accessed on March 30,2024 6 constantly rising. The birth of smart contract will certainly give rise to new legal issues.
The startup scene in Vietnam is said to have recently flourished quite vigorously with the appearance of some technology startups, such as Trip.me), Bigboml, LINA Network’, Therefore, it is imperative for Vietnam to develop new legal tools in orderto govern the use of smart contract, hence swiftly addressing new challenges that arise in the present globalization setting In this instance, the United States plays a vital role as one of the leading nations in the world with regards to the comprehensive application of smart contracts and has the necessary legal tools to regulate this matter, in which Vietnam could take lessons from and integrate them into its own legal system, by its own way. Given the aforementioned information, Ï strongly believe it is necessary to conduct more practical research on these matters as they warrant more in-depth investigation Therefore, I hereby decided to choose the topic of my graduation thesis as follows: “Legal regulation of smart contract in the United States and lessons for Team” 2. Overview situation Having spent a lot of time researching for this topic, I came to the conclusion that the majority of theses, research papers, and publications on the subject all focus on the technical aspects of blockchain technology and smart contracts, nevertheless, there is a dearth of studies that specifically address the legal issues relating to smart contract and which law system, which legal regulations to govern the use of it. The reason behind this is straightforward: when smart contracts were initially introduced to the public, they were still a difficult-to-use and technically a new and complex technology to understand and apply for normal users, therefore in order to quickly spread knowledge to the general public, a great deal of intricate technical study and publications were required.
Besides the legal regulations, there are also a number of articles that are quite intuitive in evaluating the practicality of smart contracts and expressing personal *https:/Avwrw trip me/ accessed on March 30,2024 *‘hitps:/ihelb bigbom convgioi-thieu-ve-bigbom accessed an March 30,2024 “https ://commurkete ap com/cumrencss/ima-netvrork/ accessed on March 30,2024 opinions on the legal perspective of this type of contract. Havard Law School published an article named “An Introduction to Smart Contracts and Their Potential and Inherent Limitations** in which it outline the background and functions of smart contracts, discuss whether they can be deemed enforceable legal agreements under contract law in the United States, and highlight certain legal and practical considerations that will need to be resolved before they can be broadly used in commercial contexts. On a gloabal scale, there are many articles which conducted thorough research in both technical and legal aspects of blockchain and smart contract. Christopher D Clack from University College London has an article from 2016 named “Smart contract Templates: legal semantics and code validation” Š in which he analysed legal regulations, semantical aspect which specifically describe this type of contract, security, wording styles, sample contract, etc.
Cambridge University has also published research articles and books on smart contracts, pointing out the benefits and risks of applying smart contracts inro real life situations: “The Cambridge Handbook of Smart C ontracts, Blockchain technology and Digital Platforms” (October, 2019)’ There are also several outstanding research projects, such as: “Smart Contract Leads The Way to Blockchain Implementation” by cooperation of Thomson Reuters, a Canadian multinational information conglomerate and Greenberg Traurig which approched this topic under the perspective of the legal system of the United States with smart contract; “Fundamentals of Smart Contract Security” by the Momentum Press of New Y ork in which it taught the way to understand some basic principles of smart contract and practices. In addition, the European Bank for Reconstruction and Development also pubilished a paper: “Stnart contracts: Legal Framework and Proposed Guidelines for Lawmakers’®, in which it analyzed the concept, formation and working process of a smart contract, hench dealing * __ htps;ffcœpgov law harvard ech 2018/05/26 /an-mtroduction-to-smuart-contracts-and-them-potential and- ‘Bherent-lmatations/ accessed on March 30,2024 * http /Axtwv0 cs mclac ukistaff/C_Cladcresearch/JDB-2-4 pdf accessed an March 30, 2024 7 Wtos/mnr cambridge org/care hooks ambridge -lundbock-of-smurt-contracts-blockchain-technology-and- digtal platforms /BCDDFAAD7B661E6 026804 1ACA76B3A58 accessed on March 30, 2024 "]umps:/Mawlibrary bứo/ze/bookz/181104 The Suwst Contracts Paper pdf accessed on March 30, 2024 § with the questions of what requirem ents it would take to form a valid smart contract and what is its governing lew and jurisdiction. There are some articles worth mentioning written by Vietnamese scholars and researchers. In the Science Conference Proceedings 2021 of Foreign Trade University in Hanoi, author Tran Thu Y en has written an article named “Stinart Contract and Several Ctarent Legal Issues in Vietnam”, in which she analyzed the technology foundation of smart contract, thereby giving an overview on the legal aspects of smart contracts in Vietnam with recomm endations to improve the legal system, based on several countries.
This article mainly focused on the technical aspects and legal regulations of smart contract from countries such as the United States, the United Kingdom or Singapore but only provided a few recommendations for reference to improve the legal framework of Vietnamese law regarding this particular legal issue. Another article that examined this matter but was inspired by the viewpoint of Chinese legislators is “Legal Framwork for Smart Contract — Some Suggestions For Vieam From Chinese Law’®, which was written by Nguyen Thi Minh Phuong and Nguyen Phan V an Anh and published in the Journal of Law and Practice No. 55/2023 of Law University, Hue University. This article also offered similar views as the above article: starting from an overview to China's legal regulations when regulating smart contracts and also suggested lessons that Vietnam could learn from.
Upon my research on the topic, I encountered an article which has addressed some of the interesting points regarding the difficulties in which Vietnam’s legal system has to solve in order to successfully integrate the use of smart contract into daily transactions between people, institutions and the State. That article 1s “Negotiating with code: Smart contracts and open legal issues” and was written by author Vu Thi Dieu Thao, published on the Civil Law Information Forum." Regardless of its humble word counts, this article has answered a number of foundational questions related to common issues surrounding the application of smart contracts such as Contract conclusion, Contract modification, Dispute resolution and User protection. *‡tps/Rapchủ unl eu vaviindex php AV/article Aview/269 accessed on March 30,2024 !9 https fphaphutdansu.echa vn/20 18/04 06/22/59 ktma-phn-voiem lenh-hop-dang-timg minh-v-van-de-php-Lar bo-ngo/ accessed on March 30,2024 9 In conclusion, these above articles and research papers which varied in depth and extent have contributed to the formation of the legal pieces concerning smart contracts. Based on the above premises, it is evident that the United States is at the forefront of the use of smart contracts in real-world scenarios and now boasts a more comprehensive legal framework than other nations when it comes to legal regulation and research intensity.
Therefore, it is resonable to assume that there are some lessons in which Vietnam can take from the way the United States builds its legal regulations to regulate the use of smart contract. This thesis will summarize and examine in further depth every fundamental and significant legal concern pertaining to smart contract. Additionally, based on both practical applications in the United States and Vietnam, this thesis will highlight the shortcomings and restrictions in the Vietnamese legal system and offer some suggestions and insights in which Vietnam can learn from the United States, a pioneer in the fields of blockchain technology and smart contracts. Target and mission The goal of this thesis is to examine the United States’ legal framework for smart contracts and identify any shortcomings in the national legal system by gathering and examining existing legal regulations and precedents, therefore proposing solutions and paths to contribute to the process of building and perfecting the legal framwork on smart contract in Vietnam.