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| Blockchain Legality |
Legality of Blockchain Smart Contracts in Electronic Transactions
Indonesia, America And Singapore.
The rapid development of information technology has brought various changes in the
various sectors of people's lives, especially in the trade sector which is assisted
with the role of the internet (e-commerce) to create a world without boundaries of space and time.
Internationally there have been various arrangements that underlie trade
electronically, as in the United Nations in Contracts for International Sale of Goods (CISG),
United Nation Commission on International Trade Law (UNCITRAL) Model Law on Electronics
Commerce and UNCITRAL Model Law on Electronic Signatures as legal instruments
modern technology that facilitates the ever-expanding harmonization of international trade.
In the realm of national law, e-commerce has obtained a comprehensive regulation
with the enactment of a Law Number 11 of 2008 concerning Information and
Electronic Transactions (which was later amended by Law Number 19 of 2016
concerning Amendments to Law Number 11 of 2008 concerning Information and Transactions
Electronic, hereinafter referred to as "UU ITE"), as well as various Government Regulations under it
such as Government Regulation Number 71 of 2019 concerning the Implementation of the System and
Electronic Transactions (“PP PSTE”) and Government Regulation Number 80 of 2019 concerning
Trading Through Electronic Systems (“PP PMSE”) which specifically regulates in
trade scope.
With the emergence of various innovations in the use of technology, e-commerce
underwent a modification of the model in which transaction activities were initially agreed upon via telegram or telephone information media.
In an effort to reduce direct interaction, smart contracts are being used
in electronic transactions. A smart contract, which was first introduced by Nick Szabo, is a collection of code that is stored and processed in a distributed ledger technology (DLT) computer system that is programmed to run automatically according to certain predetermined conditions (Chamber of Digital Commerce et al. 2018), the implementation of blockchain-smart contracts is not limited to trading activities, but also in the fields of insurance (insurance), crowd-funding, to the provision of services.
Smart Contracts have been implemented in electronic transaction activities in several countries, such as Quube in Singapore, Elinext from France, Ethereum from Switzerland to Stellar from America. However, until now the use of Smart Contracts has not been found in Indonesia, except in the e-commerce sector brought by Singapore, namely Qoo10.
Talking about smart contracts as a form of agreement between the parties, in
Article 1320 of the Indonesian Civil Code (“Civil Code”), legal requirements
an agreement includes:
(1) agreement of the parties
(2) the skills of the parties
(3) a certain thing
(4) lawful reasons.
Although Smart Contracts are basically a new form, electronic contracts and conventional agreements have the same form, Smart Contracts which have self-executing nature and are carried out through Blockchain technology cause several legal problems, as stated in Article 1320 of the Civil Code.
The formation of a valid agreement, the provisions regarding the legal terms of the agreement also apply to electronic contracts as regulated in the implementing regulations of the ITE Law such as PP PSTE, namely Article 46 Paragraph (2) of PP PSTE which discusses electronic transactions carried out based on Electronic Contracts as a form of agreement. the parties, which includes conditions such as:
(a) Based on the agreement of certain parties (b) carried out by legal subjects who are authorized to represent in accordance with the provisions of laws and regulations
(c) there are certain things
(d) the object of the transaction must not conflict with the laws and regulations and public order.
However, unlike PP PSTE which directly stipulates the legal terms of the agreement in Article 1320 of the Civil Code in it, PP PMSE which is a Government Regulation as the executor of the Trade Law does not provide strict conditions regarding the validity of an electronic contract.
Conventional agreement designed and signed directly by
humans or the parties directly, in contrast to Smart Contracts designed, written
and run in electronic systems or computer code eliminating the need
will be a third party in a transaction, so the validity of the Smart Contract that is run in Blockchain technology is still in question.
Regarding law enforcement and legality, Smart Contracts in America have been declared
as an agreement that can bind the parties in the terms of the Uniform
Electronic Transaction Act (UETA) of 1999, Electronic Signatures in Global and National
Commerce Act (ESIGN) of 2000 to several Court decisions and other laws
State laws in both UETA and ESIGN have been adapted in such a way as to anticipate the overlap of existing legal agreements with Smart Contracts (Cardozo Blockchain Project, 2018), which gives both electronic documents and electronic signatures legal force. which is the same as a written document as long as the parties agree to carry out the transaction electronically as stated in Section 7 of UETA. In addition, specifically in the law of the state of Tennessee, legal certainty, validity or legal certainty has been established binding power of Smart Contracts in commerce.
Likewise in Singapore, which has been actively carrying out transaction activities with Smart Contracts with the establishment of various companies engaged in trading services, educational services, to exchanges and financial services in the Blockchain system, such as Quoine, until now many cases have been resolved in Singapore (The Singaporean High Court).
With the development of electronic data processing technology now, in addition to
Law is needed to provide legal certainty for the community, but in reality the law cannot be static in line with the continued development of the existing community.
As law as a rule has a role in development, namely ensuring that all changes that occur can run regularly based on legislation or decisions court or a combination of the two.
LEGAL PROTECTION
Law is an important instrument in the development of the digital economy, both in solving certain legal problems fundamental issues, such as positive legal problems that do not have an answer in positive law (laws and regulations) itself or to solve problems that might occur (futuristic) even though they are set forth in abstract behavioral models such as accessibility and control of computer systems in Blockchian-Smart Contract and how the existing system is able to take into account changing business conditions itself.
In the end, it was this issue that gave rise to a proven problem
with the emergence of the case in Singapore, namely B2C2 Ltd v Quoine Pte Ltd (2019) which
provide legal application guidelines for problems that arise as a result of the contract
automation without human intervention (such as Smart Contracts) can be overcome. Therefore,
it is important to have legal certainty regarding the implementation of Smart Contracts in technology
Blockchain because it is feared that without obtaining a guarantee of legal certainty for the Blockchain Smart Contract, it could lead to failure to comply with the engagement agreed by the parties in the agreement in the form of a Smart Contract.
By focusing on using blockchain smart contracts in transactions especially in comparison with America and Singapore, this research will be different from previous studies.
Civil Law Law (Civil Code), Information and Transaction Law electronic, Government Regulation Number 71 of 2019 concerning Implementation of Electronic Systems and Transactions (PP PSTE) and Government Regulation Number 80 of 2019 concerning Trading Through Electronic Systems (PP PMSE) which are implementing regulations trade Act.
The research method used in writing this thesis is normative juridical which is library research on secondary data, both primary legal materials, secondary legal materials and/or tertiary legal materials, such as official documents,
books and or research results.
RESULTS AND DISCUSSION
The Concept of Trading Through Electronic Systems (e-Commerce) electronic transactions (or electronic transactions) are often associated with e-commerce which is a form of electronic transaction activity specifically in the trade sector.
Electronic Commerce or Trading Through Electronic Systems by referring to commercial activities based on electronic processing and transmission of data in the form of text, sound and images on the internet, also includes electronic money and electronic data interchange
Furthermore, in Government Regulation Number 80 of 2019 concerning Trade through the Electronic System itself, e-commerce is defined as a trade that are carried out through a series of electronic devices and procedures. With
the existence of the internet as a significant supporting element for the growth of e-commerce for
community, as well as a medium in sending electronic messages or exchanging data in transactions such as websites or online marketplace platforms.
The use of the internet provides various advantages such as:
(1) wide internet coverage, cheap
cost, speed and ease of access obtained by the public
(2) electronic use
data on the internet as an easy delivery of messages, both in electronic form
as well as digital.
Different from the agreement
Conventionally in general, electronic contracts are essentially an agreement
using electronic media
(1) Shrink and Wrap Contract
(2) Click and Wrap Contract
(3) Browse and Wrap Contract
(4) Lots of Mail and Wrap Contracts
generally known.
This kind of electronic contract has been widely regulated in the UNCITRAL Model
Law on e-Commerce, as e-mail has been recognized as a data message received
as authentic evidence in electronic transactions in Article 2 Model Law on e-Commerce.
Nationally, the regulation regarding electronic contracts in Indonesia is quite adequate
with the Law on Information and Electronic Transactions, Government Regulations
Number 71 of 2019 concerning the Implementation of Electronic Systems and Transactions (“PP PSTE”)
