Applicability of Smart Contract in the Bhutanese Legal System

Abstract

Since e-commerce in Bhutan is still in its infancy, the laws regulating electronic transaction has not been long since its enactment. This paper will try to scrutinize the existing laws on contract and electronic transactions and examine if smart contracts can be legally binding in Bhutanese legal system. This paper focuses specifically on the formation and formalities of contract under the existing laws in Bhutan to identify the legal tension that rises with the application of smart contracts that encompasses issues like formation and formalities.

The legislation governing electronic transaction has no specific and clear provision to accommodate smart contracts, which warrants a new law regulating electronic transactions in Bhutan to give smart contracts a legal status. The comparative study of the two foreign jurisdictions imparts the best practice of the laws in common law jurisdictions, which Bhutan could acquire.