Category: Ethereum (ETH)

Introducing OpenLaw

OpenLaw is a blockchain-based protocol for the creation and execution of legal agreements. Using OpenLaw, lawyers can more efficiently engage in transactional work and digitally sign and store legal agreements in a highly secure manner, all while leveraging next generation blockchain-based smart contracts.

We are the first project to comprehensively stitch together traditional legal agreements with blockchain-based smart contracts in a user-friendly and legally compliant manner. To see an early peek of OpenLaw in action, click here or here to see our demos or continue reading below.

Why OpenLaw?

The first written agreements appeared in Mesopotamia thousands of years ago — pressed into clay tablets with cuneiform pens. Since these first written arrangements, our world has steadily been structured through legal prose. Contractual agreements memorialize fundamental human relationships, help people take risks and build industries, and serve as the spine for organizations that shape our everyday lives.

The first written agreements appeared in over 4,000 years ago in Mesopotamia

Yet, despite the pervasiveness of legal agreements — and despite serving as the cornerstone of the $437 billion U.S. legal industry — the way contracts are created and generated has not undergone significant changes. While agreements are no longer memorialized in clay, lawyers have failed to take advantage of advances in computing to streamline and simplify their work.

For most lawyers, the creation of a standard contract follows a well-trodden path. Lawyers meet with clients, assess their needs, and laboriously draft agreements using written templates derived from previous work. Agreements are customized based on the facts at hand, but much of the text from deal to deal (or transaction to transaction) remains constant.

Agreements are written in legal prose, which sometimes creates ambiguities and litigation risk. Simple draftsmen’s errors like failing to include an innocent Oxford comma can lead to disastrous results.

Once an agreement is revised, reviewed, and finalized, signature pages are clumsily swapped between parties and generally signed using ink. For large transactions, getting these signatures usually requires the assistance of an overqualified associate, which slows down the closing of complex transactions and wastes valuable time.

The storage of legal agreements is fractured and insecure. Agreements sit as attachments in emails, are stored in insecure document management systems, or worse, in musty cabinets — becoming forgotten relics only unearthed when a dispute arises. Legal documents act as a honeypot for ill-intentioned hackers who seek to profit from the valuable confidential information created and maintained by lawyers.

Perhaps of greater concern, signed agreements remain frozen in time, impervious to the outside world. Changing the conditions of a contract requires formal amendments, waivers, or renegotiation. Agreements cannot respond to real world events or update based on new circumstances. In other words, they aren’t programmable.

Hello World

OpenLaw aims to fix many of these problems, by reimagining the creation, execution, and storage of legal agreements from the ground up. Using OpenLaw, lawyers and organizations can automatically create and manage the execution of legal documents, and if desired, embed Ethereum-based smart contracts into legal agreements, which can decrease ambiguity related to certain legal prose.

As we show in our first demos, OpenLaw offers “legal templates” which can be enhanced using our “Legal Markup” language. Our Legal Markup language is akin to Wikipedia’s “wiki text” with greater functionality, and enables anyone to wrap logic and other contextual information around traditional legal prose.

Our Legal Markup language makes the once painful process of preparing legal agreements a snap and drastically reduces the time necessary to generate and execute a range of contracts — and not just simple agreements. Anyone can create a legal template, often in a matter of minutes, and rapidly identify an agreement’s key variables and optional terms.

Once a legal template is created, our interface walks a user through areas that are generally customized in that agreement and automatically regenerates documents in real time depending on the user input.

For example, as we show in our demo, using OpenLaw’s Legal Markup language it becomes possible to collapse the four different versions of the Simple Agreement for Future Equity (SAFE) — a common financing document — into one legal template, flipping between the different standard variations in real time with several clicks.

Our Legal Markup language is comprehensive and provides the tools necessary to create truly programmable legal agreements. Currently it supports if → then logic, aliasing, multi-variable expressions, hidden variables, and can even perform basic calculations.

OpenLaw is the first robust project that actually enables the creation of “smart” legal agreements. Our legal markup language provides an easy way for anyone to reference and trigger an Ethereum-based smart contract to manage contractual promises. Using OpenLaw, any Ethereum smart contract can be embedded into a legal agreement in a few lines and automatically triggered once the agreement is digitally signed by all parties.

As a result, using OpenLaw, you can create agreements and commercial relationships that simply were not possible before. For example, as shown in the below demo, with OpenLaw, we can build a simple employee offer letter, with the ability to pay the employee ether in real time — every minute. There is no payroll processor or other intermediary intimately involved in the creation and execution of the agreement, and the employee can watch his or her account increase in value as the day goes on.

One way to view OpenLaw is as the glue for the emerging blockchain-based stack. Assets and other digital tokens are generated and secured by blockchains like Ethereum, and OpenLaw provides a seamless user experience to structure and govern transactions involving those assets in a way that is familiar to today’s world.

Example Call on OpenLaw for a smart contract

All agreements on OpenLaw can be digitally signed with ease. Once an agreement is finalized, it can be sent for signature via email. Signing simply requires a click of a button, and signatures are stored on the Ethereum blockchain, providing them with a degree of permanence for future reference. Once signed by all relevant parties, each party and the sender receives an executed copy for their records.

Because they are stored on IPFS and the Ethereum blockchain, legal agreements generated via OpenLaw are more private and secure. None of the legal templates or generated agreements are stored on our centralized servers or the centralized servers of Amazon, IBM, or Google, so the information is less susceptible to cyber security threats. Right now, we require that you create a user account with OpenLaw, but over time we aim to minimize the information we store and manage.

Soon lawyers will be able to generate and manage documents in a way that truly resembles the paper-based world, without the need for these agreements to pass through third-parties who are not privy to a contract.

The OpenLaw Team

OpenLaw has an amazing team, lead by Aaron Wright and David Roon, and the support of ConsenSys — a blockchain venture production studio.

Wright is an Associate Clinical Professor at Cardozo Law School and director of the school’s Blockchain Project. He is chair of the Enterprise Ethereum Alliance’s Legal Working Group, an academic fellow at CoinCenter, an editor at Ledger, and has a forthcoming book with Primavera DeFilippi (Blockchain Technology and the Law: The Rule of Code) under contract with Harvard University Press.

Roon is the creator of JVM based tools to integrate Ethereum development; creator of Cubefriendly, an open data database engine. He is a 2009 graduate of Technion.

Next Steps

This first post is just a sneak peek of the broader vision for OpenLaw. OpenLaw will anchor a truly collaborative platform for lawyers, helping lawyers collaborate on standardized templates (reducing draftsmen’s errors), embed more advanced smart contracts (including smart contracts referencing outside data feeds), and supporting an independent ecosystem of robust legal technology tools.

If you’re interested in our vision or our technology, sign up to learn more or please reach out at [email protected] Core components of the OpenLaw stack will be open source and we’re looking for kindred spirits who feel passionate about building a modern, secure, and more efficient legal system. Our team is rapidly growing, and we would love to talk to you!

In the upcoming weeks, we’ll be providing deeper dives into how OpenLaw works and begin releasing additional demos. Stay tuned!

This article was originally published on: Medium on