“Is The DAO a legal contract?
Smart contracts were initially envisioned as having the potential to replace or supplement legal contracts for some functions. But there’s a persistent myth that smart contracts are inherently legal contracts. This is not true. In fact, the main perceived feature of smart contracts is the ability for code, rather than law, to govern. The concept of code displacing law has been around for some time. (…)
Everyone who sent ETH to the DAO to create tokens agreed to a set of terms — but that doesn’t necessarily mean that there was an enforceable legal contract. The main question is whether or not there are actually two or more legal entities involved. We know that The DAO is not a legal entity. We also know that each token holder’s decision to send ETH to The DAO is not contingent upon any other token holder, and that there is no agreement between token holders. Finally, there isn’t any agreement between token holders and the creator of The DAO’s code, slock.it (note the absence of terms like ‘we’, ‘us’, or ‘slock.it’ — which you would expect to see in a standard terms of service contract).
The DAO doesn’t involve a legal contract. Token holders certainly had expectations about what should happen with the ETH they sent to The DAO, based on the code of The DAO. But this isn’t a legal contract, because The DAO isn’t a legal entity that is capable of agreeing to anything. The DAO is a compilation of code on the Ethereum blockchain — nothing more, nothing less.”
Excellent piece by Reuben Bramanathan – read full article on medium here: https://medium.com/the-coinbase-blog/blockchains-smart-contracts-and-the-law-709c5b4a9895#.8vjiaibzk