Blockchain + Frictionless Legal Contracting
By Aaron Wright, Associate Clinical Professor of Law, Director of Tech Startup Clinic and Blockchain Project at Cardozo School of Law and founder of OpenLaw the smart contract system; plus David Roon of blockchain development company, ConsenSysLLC
In this piece, Wright and Roon, explain how OpenLaw has built its own contract negotiation and management tools that rely on blockchain technology. They also explain that ‘by leveraging blockchain technology, OpenLaw is eliminating the pain of entering into commercial transactions and streamlining contract execution’.
No doubt there will be people who ask questions as to whether using blockchain is the right answer to the friction question, but OpenLaw have done their homework and made a couple of useful videos that explain their system. And of course, one could also say: if it works, then why not use blockchain, even if there are other ways to solve this problem? But, you decide. Please check out the videos and the piece below. Enjoy.
Making Contract Negotiation and Execution a Snap
Ask any transactional lawyer and they’ll lament the countless hours they spend drafting and managing legal agreements, collecting relevant information from each side, negotiating routine terms, and sending out and following-up with parties to collect signatures. The process is slow, laborious, and makes the practice of law painful.
At OpenLaw, we’ve been hard at work reimagining the transactional legal process from the ground up, building tools that dramatically reduce the time and complication of executing legal agreements. At its core, a blockchain enables the creation of n-sided marketplaces; in other words, a blockchain can serve as a spine that helps disparate groups of people manage and coordinate group activity.
def. n-sided marketplace (n): a platform that operate as an intermediary, which enables multiple distinct groups of customers to interact with each other: members of each group benefit from interacting with those from other sides of the market.
By relying on the Ethereum blockchain and OpenLaw, lawyers and their clients gain the ability to use a blockchain as a common infrastructure to manage and execute legal agreements in a trusted manner. And by relying on OpenLaw’s new “draft” tools, we’re now able to further streamline the cumbersome process of contract negotiation and execution.
As we show in our latest demo, using OpenLaw’s new “draft” functionality, anyone can select a precedent agreement from our common repository, make minor tweaks, and send it off to the other side for further input and review.
Once received, the opposing party can quickly fill-in missing information, make minor changes to the agreement (if necessary), and sign the agreement with one click. After signature, the party that drafted the agreement is notified, can swiftly review any changes, and sign the agreement. By relying on a blockchain, we can move beyond the era of sending around drafts and digging through inboxes.
Even more profound, using OpenLaw, anyone can create a legal agreement, which leaves key terms open for the other side to input. Contracts effectively transform from static documents into a menu of acceptable options and clauses. A counterparty can select from acceptable terms and the entire agreement can be regenerated on the fly. The need for back-and-forth negotiation is lessened, and the entire process is mediated by the Ethereum blockchain.
Managing and Tracking Agreements
To ease the pain of entering into agreement, OpenLaw has also developed new set of “contract management” tools that makes it easier for parties to keep track of and seamlessly regenerate agreements if needed.
Every agreement generated via OpenLaw can be accessed, tracked, and recreated to ensure that no one loses an agreement again. Even better, OpenLaw is compatible with legacy legal tools, like Microsoft Word. Agreement executed via OpenLaw can be downloaded and saved as a Word document.
Over the next several months, we’ll be rolling out additional demos and are continuing to rapidly expand our team. We’re building the future of law. If you want to know more, please send us a note at firstname.lastname@example.org.
This article was originally published by OpenLaw yesterday (27 Feb, 2018), it is republished here with the team’s kind permission. Thanks Aaron, David and team!