Problem: Costly and ineffective enforcement of agreements.
The ability to make and enforce contracts and resolve disputes is fundamental if markets are to function properly. Good enforcement procedures enhance predictability in commercial relationships and reduce uncertainty by assuring investors that agreements will be upheld promptly by local courts.
Organisation for Economic Co-operation and Development (OECD)
Today we have several solutions. Each has its limitations.
- Legal Contracts: conventional legal contracts, signed in paper or virtual form. Conventional legal contracts are often expensive to draft and may require consultation with lawyers. In the case of a dispute, courts provide slow and costly resolution.
- Do It Yourself Legal Contracts: Services like LegalZoom provide customizable contract templates. Consumers save time and money creating agreements, but these systems do nothing to solve the problem of slow and costly dispute resolution.
- Smart Contract: “Self-enforcing” contracts use an external Oracle to decide when to move funds, but cannot deliver the correct result when technical failure or unforeseen circumstances (e.g. Acts of God) occur. Many agreements cannot be expressed in a smart contract at all. An external oracle cannot assess subjective information.
- Smart Legal Contract: A smart contract that incorporates a binding legal agreement, so there is reliable backup system in case the contract fails. The bad news is that the reliable backup system is reliably costly and slow.
According to World Economic Forum Report blockchain technology will be the technology that will impact the nature of business relationships the most by making them more efficient and transparent, reaching, in 2027, a value of around 10% of world GDP.
Jur will be the ecosystem for making business agreements on the blockchain.