Volume 03 Issue 02-2023
77
American Journal Of Social Sciences And Humanity Research
(ISSN
–
2771-2141)
VOLUME
03
I
SSUE
02
Pages:
77-81
SJIF
I
MPACT
FACTOR
(2021:
5.
993
)
(2022:
6.
015
)
(2023:
7.
164
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
ABSTRACT
This scientific article discusses the issue of the legal status of smart contracts and possible ways to resolve smart
contracts in the Republic of Uzbekistan. In the process of conducting a legal analysis, much attention was paid to the
current trend in changing legislation, especially reforms in the field of digitalization of finance and the provision of
public services were disclosed. In the final part of the work, conclusions are given on the study and the corresponding
proposal for the introduction of smart contracts in the legislation of the Republic of Uzbekistan.
KEYWORDS
Digitalization, integration, smart contract, asset
INTRODUCTION
One of the key points of digitalization of the state and
society is the introduction of a system of smart
contracts into the public life of the country. The
process of development and gradual transition to this
platform has already begun in Uzbekistan.
Before considering the legal aspects of the
introduction of Smart contracts into the business life of
the country, it is necessary to define this concept to
build on it in the future.
To date, there is no single developed and approved
definition of a Smart contract. Every scientist and
Research Article
PROSPECTS FOR SETTLEMENT OF SMART CONTRACTS IN THE
REPUBLIC OF UZBEKISTAN
Submission Date:
February 13, 2023,
Accepted Date:
February 18, 2023,
Published Date:
February 23, 2023
Crossref doi:
https://doi.org/10.37547/ajsshr/Volume03Issue02-14
Nodirakhon Abdurakhmanova
Lecturer At Tashkent State University Of Law Tashkent, Uzbekistan
Journal
Website:
https://theusajournals.
com/index.php/ajsshr
Copyright:
Original
content from this work
may be used under the
terms of the creative
commons
attributes
4.0 licence.
Volume 03 Issue 02-2023
78
American Journal Of Social Sciences And Humanity Research
(ISSN
–
2771-2141)
VOLUME
03
I
SSUE
02
Pages:
77-81
SJIF
I
MPACT
FACTOR
(2021:
5.
993
)
(2022:
6.
015
)
(2023:
7.
164
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
legislator takes an existing definition as a basis and
refines it, so in different literature, you can find
definitions of Smart contracts that differ slightly from
each other.
THE RESULTS OF DISCUSSION
For this work, the definition of Nick Szabo is taken as a
basis: A smart contract is an algorithm of computerized
transactions that fulfills the terms of the contract [8].
Although this definition does not fully describe most of
the distinguishing features of a Smart contract from
other types of contracts, it gives a general idea of it.
In the digital age, all countries are trying to reduce the
costs of bureaucracy, especially this trend is observed
in the CIS countries, where paper business turnover
still prevails over electronic. A few years ago, it was not
possible to receive public services in electronic format,
nowadays most services can be obtained through the
World Wide Web. Such an opportunity not only creates
convenience for the population but also reduces the
costs of providing these services in person (salary by an
employee, rent of premises for the provision of
services, etc.).
One of the goals of implementing Smart contracts is
also to reduce costs since among the advantages of
Smart contracts is their ability to reduce the number of
transactions that accompany conventional contracts,
for example, the costs associated with securing the
execution of such a contract (for example, court costs
or costs associated with the provision of collateral). In
addition, the costs associated with the participation of
an intermediary in the execution of a contract (for
example, a bank or an insurance company) are also
reduced in such contracts due to their disinter
mediatory nature [9]. However, it would be wrong to
conclude that Smart contracts are cheaper than
conventional ones: the infrastructure necessary for the
implementation of Smart contracts and the costs
associated with the development ("drafting") of the
terms of such contracts are still quite high. But despite
this, the use of Smart contracts pays for its cost in the
long run.
Given that Smart contracts reduce transaction costs by
excluding intermediaries, they are likely to increase
their relevance and scale. Admittedly, widespread
adoption is still a few years away, given that Smart
contracts need to be integrated with existing systems
in the industry, which raises questions about the effort
and investment that will be required. However, just as
companies are beginning to identify the necessary
changes, including in IT systems, processes, and
change management policies, regulators and lawyers
should capitalize on this momentum and focus on
Smart contracts as part of a broader innovation effort
[11].
Innovative technologies do not necessarily require
innovative jurisprudence, and in many cases, existing
legal systems will be quite sufficient to deal with the
Volume 03 Issue 02-2023
79
American Journal Of Social Sciences And Humanity Research
(ISSN
–
2771-2141)
VOLUME
03
I
SSUE
02
Pages:
77-81
SJIF
I
MPACT
FACTOR
(2021:
5.
993
)
(2022:
6.
015
)
(2023:
7.
164
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
"new" functions of Smart contracts, for example, their
expression through computer code. In other cases,
existing rules will need to be adapted to the new
context of Smart contracts (for example, concerning
signing with a cryptographic key and compliance with
confidentiality rules). Some of the solutions may even
be provided by the contracting parties through the
development of their contracts (for example, the
allocation of responsibilities and the definition of
applicable
legislation
and
dispute
resolution
mechanism). In a broader sense, Smart contracts
provide lawyers with a unique opportunity to lead the
development of a new rapidly developing field.
To ensure the full functioning of Smart contracts on
the territory of Uzbekistan, it is necessary to give legal
status to Smart contracts in the legislation and give a
legal definition to them. In this case, lawyers, and legal
experts will need to choose one of the following:
"Whether to recognize a Smart contract as a separate
type of contract or equate it to one of the forms of the
contract?"
If the Smart contract is recognized as a new form of
contract, and not an independent type of contract,
then cardinal changes are not required.
Whereas, if you give the status of a Smart contract as a
separate type of contract, then it will be necessary to
implement and resolve the following issues.
After giving the official status, it is necessary to choose
a model for the implementation of Smart contracts in
the legislation of Uzbekistan (a separate integration
model or a hybrid model for the integration of Smart
contracts). In this case, if you choose a separate model,
the classic paper contracts will retain their place in
business turnover and will not undergo changes, and
the Smart contract will only be an addition to them,
which will reflect part of the contract in terms of
execution, and all essential conditions will be specified
in the classic contract. In this model, the code fragment
will not be part of a legal contract but will be only a
technical means that ensures the automatic fulfillment
of the obligation. In this case, in the event of a
contradiction between the computer program
executing the contract and what is written in the terms
of the contract, the scenario described in the classic
contract will prevail [10]. But, in our opinion, this will
lead to an increase in costs (since it will be necessary to
duplicate the contract in the form of a paper contract
and a Smart contract), and will also lead to an increase
in disputes regarding contradictions between the
terms of the contract and the Smart contract. Thus, the
goal expected from the introduction of Smart
contracts will not be achieved - optimization of the
process of concluding and executing contracts,
eradication of corruption, reduction of queues in
government agencies, reduction of costs and probable
losses during the execution of contracts.
Volume 03 Issue 02-2023
80
American Journal Of Social Sciences And Humanity Research
(ISSN
–
2771-2141)
VOLUME
03
I
SSUE
02
Pages:
77-81
SJIF
I
MPACT
FACTOR
(2021:
5.
993
)
(2022:
6.
015
)
(2023:
7.
164
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
CONCLUSION
We consider it expedient to adopt the law "On
amendments to the Civil Code of the Republic of
Uzbekistan", in terms of clarifying the concept of the
form of the transaction, equating Smart contracts to a
simple written form of the transaction, the expression
of a person's will by electronic or other similar technical
means. To establish that the fact of the transaction
execution performed by the computer program is not
disputed (except in cases of interference with the
operation of the program), that is, the actions
performed by the Smart Contract to fulfill obligations
will be recognized as legitimate and will not be
disputed by the parties or any other third party.
In conclusion, the serious impact of technology on
commercial practice will further revolutionize the way
commercial contracts are formed and executed and
will lead to the emergence of new market practices.
We hope that despite the difficulties of introducing
Smart contracts into legislation, this practice will also
be established in Uzbekistan and will serve to improve
the business climate, deepen the digitalization of the
country, increase profits, improve the investment
climate, and develop the financial market.
REFERENCES
1.
Resolution of the President of the Republic of
Uzbekistan No. PP-3832 "On measures for the
development of the digital economy in the
Republic of Uzbekistan" dated 03.07.2018
((National Database of Legislation, 04.07.2018, No.
07/18/3832/1452).
2.
Civil Code of Republic of Uzbekistan, 21.12.1995
(Bulletin of the Oliy Majlis of the Republic of
Uzbekistan, 1996, Appendix No 2; 1997 г., No 2,
article 56; 1998, No 5-6, article 102, No 1, article 20,
No 9, article 2
29; 200, № 1
-2, article 23; 2003, No 5,
article 67).
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The Law of the Republic of Uzbekistan "On
Electronic Government" No. 395 dated 09.12.2012,
Collection of Legislation of the Republic of
Uzbekistan, 2015, No. 49, Article 611
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Volume 03 Issue 02-2023
81
American Journal Of Social Sciences And Humanity Research
(ISSN
–
2771-2141)
VOLUME
03
I
SSUE
02
Pages:
77-81
SJIF
I
MPACT
FACTOR
(2021:
5.
993
)
(2022:
6.
015
)
(2023:
7.
164
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
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