Ricardian contracts — legally binding agreements on the blockchain

“What is the difference between a Ricardian contract and a smart contract?

Smart contracts refer to a type of digital agreement that has already been agreed and can be executed automatically. A Ricardian contract is a contract model to record the “intentions” of a contract and all “actions” that relate to that contract, even before the contract is executed. Using the hashes that refer to external documents, Ricardian contracts can also easily refer to code. There will undoubtedly be more cross-fertilization between Ricardian contracts and smart contracts in the future and transactions will probably be carried out on the basis of different hybrid forms.

What can a Ricardian contract be used for?

Ricardian contracts can be used for any type of agreement. Unlike smart contracts, it is not limited to use in simple circumstances such as financial transactions. A Ricardian contract is used to determine the responsibility (liability) of an acting party when trading with another party. A contract represents a unit of certain goods or services. A Ricardian contract uses a signed agreement between parties, which cannot be falsified once a contract has been signed.”

Via Diederick Cardon on Medium – read full article here: http://ow.ly/Ye6G30gZStG