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A Legal-Relationship Establishment in Smart Contracts: Ontological Semantics for Programming-Language Development

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Advances in Computing and Data Sciences (ICACDS 2021)

Part of the book series: Communications in Computer and Information Science ((CCIS,volume 1440))

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Abstract

Machine-readable smart contracts (SC) on blockchains promise drastic enhancements in collaboration efficiency and effectiveness in that cost- and time reductions can be achieved while the quality of services increases. We address existing shortcomings of SCs that are in tendency incomplete for legal recognition especially to smart-contract-enabled funding rounds, not collaborative business-process reflective and are also not aware of their own processing state to justify the claim of smartness. When conflicts occur, tracing the past performance of conventional contract (CC) execution is very slow and expensive while in addition, CCs are challenging to enforce. On the one hand, the legal status of SCs based funding rounds is currently not clarified and the question arises if SCs comprise the necessary legal- concepts and properties. Current SC solutions do not suffice in those regards. To fill this gap, we develop the smart-legal-contract (SCL) ontology to define the legal- and collaborative business concepts and properties in the SCs. Formal methods, such as Colored Petri Nets (CPNs), are suitable to design, develop and analyze processing state of SCs in order to trace the performance of contractual-rights and obligations. In this work, SCL ontology is formalized using Colored Petri Nets resulting in a verifiable CPN model. Furthermore, we conduct a state-space analysis on the resulting CPN model and derive specific model properties. A running case from the automotive supply chain domain demonstrates the utility and validity of our approach.

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Notes

  1. 1.

    https://neo.org/ Neo blockchain—Home Page.

  2. 2.

    https://cardano.org/ Cardano—Home Page.

  3. 3.

    https://www.hyperledger.org/ Hyperledger—Home Page.

  4. 4.

    https://www.w3.org/OWL/.

  5. 5.

    http://cpntools.org/.

  6. 6.

    Note that this freedom may be limited in the case of business-to-consumer contracts and special kind of contracts with significant consequences for the contracting parties (e.g., the selling and transfer of real estate) where the law may demand a special form requirements. Still, as these contracts are not part of our running case, we will not discuss the legal problems connected to the operationalization of such contracts as smart contracts any further.

  7. 7.

    Full ontology: https://bit.ly/3c5eYO5.

  8. 8.

    Full download CPN model: shorturl.at/cxBE9.

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Acknowledgments

This article is based on research from the Erasmus+ Strategic Partnerships Project - 2018-1-RO01-KA203-049510 “Blockchain for Entrepreneurs - a non-traditional Industry 4.0 curriculum for Higher Education”.

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Authors and Affiliations

  1. Tallinn University of Technology, Akadeemia tee 15 a, Tallinn, Estonia

    Vimal Dwivedi & Alex Norta

Authors
  1. Vimal Dwivedi
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Correspondence to Vimal Dwivedi .

Editor information

Editors and Affiliations

  1. University of KwaZulu-Natal, Durban, South Africa

    Mayank Singh

  2. Jaypee University of Engineering and Technology, Guna, Madhya Pradesh, India

    Vipin Tyagi

  3. Jaypee University of Information Technology, Waknaghat, Himachal Pradesh, India

    P. K. Gupta

  4. Institute of Information Theory and Automation, Prague, Czech Republic

    Jan Flusser

  5. University of Ottawa, Ottawa, ON, Canada

    Tuncer Ören

  6. MVPS's Karmaveer Adv. Baburao Ganpatrao Thakare College of Engineering, Nashik, Maharashtra, India

    V. R. Sonawane

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Dwivedi, V., Norta, A. (2021). A Legal-Relationship Establishment in Smart Contracts: Ontological Semantics for Programming-Language Development. In: Singh, M., Tyagi, V., Gupta, P.K., Flusser, J., Ören, T., Sonawane, V.R. (eds) Advances in Computing and Data Sciences. ICACDS 2021. Communications in Computer and Information Science, vol 1440. Springer, Cham. https://doi.org/10.1007/978-3-030-81462-5_58

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  • DOI: https://doi.org/10.1007/978-3-030-81462-5_58

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