Guernsey drafts new laws on smart contracts

Posted: 23/01/2019

Guernsey has drafted new laws to offer certainty in the use of electronic agents in transactions and contract matters, and to create a secure environment for the exploitation of technology for specialist financial services.

The Electronic Transactions (Electronic Agents) (Guernsey), 2019, Ordinance, lodged this week, aims to offer greater certainty in the use of artificial intelligence and distributed ledger technology, and to encourage adopters of technology solutions to use Guernsey.

The law will allow the formation of a contract through the interaction of electronic agents, on the presumption that natural persons intended to create a legally binding contract.

It will also cover interactions between an electronic agent and a natural person. Electronic agents will be able to be involved in transactions in several ways, without revoking the legal validity of a contract.

These legal developments build on Guernsey’s existing electronic transactions legislation, which dates back to 2000, in offering express confirmation that so-called smart contracts – where computer code carries out a task in response to information received, without further human input – will be legally recognised.

The laws of most jurisdictions do not yet explicitly address electronic agents, so the move marks an important development in progressing the island’s digital ambitions and positioning Guernsey law as the international law of choice for those seeking to use smart contract technology.

• The first installment of the 2019 Guernsey Seminar Series, which will be held in London on 29 January, will provide a briefing on the Electronic Agents Ordinance 2019T. For more information click here


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