The Recognition and Regulation of Smart Contracts in South Africa

Authors

DOI:

https://doi.org/10.17159/1727-3781/2024/v27i0a16383

Keywords:

smart contracts, blockchain, ECTA, Electronic Communications and Transactions Act, fourth industrial revolution, 4IR

Abstract

Our understanding of contracts continues to evolve. Electronic contracts that have typically taken the form of shrink-wrap, click-wrap, web-wrap, scroll-wrap, multi-wrap and sign-in-wrap agreements have undergone further developments with the introduction of automation in electronic contractual engagements and, more recently, the advent of the so-called "smart contract". Different types of smart contracts exist, including smart contracts that operate on blockchain technology. Despite these developments in commercial and contractual activities, the South African legal framework does not officially recognise smart contracts. The use of the Electronic Communications and Transactions Act, 2002 (ECTA) as a mechanism for the regulatory oversight of smart contracts in South Africa is, in its current form, woefully inadequate and limited in its application to smart contracts. Other jurisdictions, like the European Union (EU), have passed draft legislative and regulatory documentation called the Data Act to address smart contracts, whilst the UK Law Commission has provided recommendations to regulate smart contracts. As South Africa currently has no equivalent to the EU's draft Data Act and has not considered the operation of smart contracts in South Africa, the position in the EU and United Kingdom (UK) is considered in this paper to provide guidelines as to the aspects that it would be necessary to regulate in a South African context.

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Author Biographies

  • Michele van Eck, University of Johannesburg

    Associate Professor of Private Law, University of Johannesburg, South Africa.

  • Fafa Agbeko, University of Johannesburg

    LLD Candidate, University of Johannesburg, South Africa.

References

Bibliography

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Published

05-09-2024

Issue

Section

Notes

How to Cite

van Eck, M., & Agbeko, F. D. (2024). The Recognition and Regulation of Smart Contracts in South Africa. Potchefstroom Electronic Law Journal, 27, (Published on 5 September) pp 1-24. https://doi.org/10.17159/1727-3781/2024/v27i0a16383

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