Smart Contracts: From Code to Legal Recognition

[Chawla Solutions]

For years, the phrase “code is law” was treated as a guiding philosophy in blockchain circles. Today, that idea is crossing into legal reality. Courts in both the US and EU are beginning to view smart contracts not just as code, but as enforceable legal agreements.

How Courts Are Interpreting Smart Contracts
• A smart contract can represent an offer.
• An executed blockchain transaction is treated as acceptance of terms.
• DAOs are increasingly seen as legal entities with obligations and liabilities.

Real-World Cases
The Ooki DAO case in the United States marked a turning point, where a decentralized autonomous organization was held liable for damages. In parallel, states like Wyoming have created legal frameworks allowing DAOs to register as LLCs, granting limited liability protection. In the EU, regulators are also pressing platforms to provide disclosure of risks before launching smart contracts.

Why This Matters
Developers and founders can no longer assume that blockchain code exists outside legal frameworks. Writing a smart contract is effectively writing a contract in the legal sense, with rights and obligations attached.

Conclusion
The era of “deploy and forget” is ending. As smart contracts gain legal recognition, compliance must sit alongside functionality. Builders who adapt early to this shift will avoid costly disputes and help shape a more sustainable Web3 ecosystem.