Smart contract: Difference between revisions

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 So, where the contract is of a highly operational nature — and much of the machinery of finance is  — smart contracts aren’t so much a revolutionary idea as a necessary one.
-But the problem is this: while 80% of your {{t|contract}} is electronic and suitably “smart” already, the other 20% — all the things that matter only when things turn growlish — ''isn’t''. The [[close out]] rights, [[Termination event|termination triggers]] and [[events of default]]: matters that can hardly be coded into anything, much less ascertained by electronic transmission between the parties. They require judgment, experience and evaluation, both of their existence (is that [[Material adverse change|adverse change]] really “material”? Hey, [[legal eagles]]! What does “material” mean?) and in terms of your reaction to them: Ok, the [[NAV trigger]] has been hit. But is this the real thing or is this  drill? Do we want to close out? How is our overall position? What do we think of the counterparty's forward prospects? What are the pros and cons?
+But the problem is this: while 80% of your {{t|contract}} is electronic and suitably “smart” already, the other 20% — all the things that matter only when things turn growlish — ''isn’t''. The [[close out]] rights, [[Termination event|termination triggers]] and [[events of default]]: matters that can hardly be coded into anything, much less ascertained by electronic transmission between the parties. They require judgment, experience and evaluation, both of their existence (is that [[Material adverse change|adverse change]] really “material”? Hey, [[legal eagles]]! What does “[[material]]” mean?) and in terms of your reaction to them: Ok, the [[NAV trigger]] has been hit. But is this the real thing or is this  drill? Do we want to close out? How is our overall position? What do we think of the counterparty’s forward prospects? What are the pros and cons?
 No [[smart contract]] will be able to measure these things, much less make an executory decision about them.