A Live Contract is a formal agreement that allows interaction. It is formalized in a way that is understandable for both humans and computers. This allows some tasks to be automated. However, the contract only shows the rules and presents available options. It allows each party to make their own decisions. By doing so, the process remains in control of us humans rather than the machines.
With LegalThings One, we’re introducing Live Contracts. This is a digital and interactive formal representation of an agreement. It can be used to create any type of agreement, from legally binding contracts to complete laws. Live Contracts show the rules relevant to the current situation, provide available options and assist in making decisions and show possible consequences of choices. Live Contracts are also interpretable by computers. This allows simple and redundant tasks to be automated. However automation should not take away the ability to dispute and the power to disobey, as these are key features of a liberal and free society.
As long as all parties agree, they will all follow the rules described in the contract without the need to enforce it. When there is a disagreement, it needs to be resolved through mediation or arbitration. By storing all interactions we reduce the need of fact finding in case of a disagreement. A single source of data to hold all the information of past events might easily be manipulated. To mitigate this risk, data is stored in a verifiable, permanent and immutable way.
A Live Contract formalizes procedures as a finite state machine (FSM). An agreement may consist of many procedures, so a Live Contract can contain multiple FSMs. Finite state machines can be visualized as flowchart and modeled in a Turing Machine, meaning that it’s accessible for both humans and computers.
The Live Contract describes actors. An actor is anybody that can interact with the Live Contract. In some cases this is a specific person, in other cases it’s an organization or a specific role within an organization. A set of state transitions from a single state by a single actor is defined as an action. An action has an id, the actor that may perform it, the possible state transitions and instructions on how to update the projection of state. Which state transition is used is derived from the result of the action or choice presented by the action. Each action has a default transition used to define the ‘happy flow’. Different FSMs within the same Live Contract may include the same action (with an identical id). This means one event can trigger a state change in multiple FSMs within a single contract.
Started in 2014 as platform to create, share and sign contracts in a digital way. After the success of our first company FIRM24.com, we believed that DTM (Document Transaction Management) would be the next big thing after ERP and CRM-systems.
We released the first version of the LegalThings platform. This version introduced a document and form builder, a document management system, advanced user and permission management and digital signing.
For FIRM24 we had created software to run the procedures behind an incorporation. Other customers were also interested in these digitized procedures. We did a small pivot, now focusing on digitizing the contracts as finite state machine, rather than just signing.
We have explored different methods of providing proof of signed documents. While other parties relied on trust and certifications, we wanted a better solution. We started using the blockchain for proof of existence.
We experimented with Ethereum Smart Contracts and found out that it could only be used for self-enforcing agreements. Inherent constraints make them unusable for legally binding contracts.
Instead, we found a much better solution in using our FSM in combination with the blockchain.
During the blockchain hackaton organized by the Dutch ministry of Justice and Security, we demonstrated that a whole law can be digitized as a FSM and stored on the blockchain. This won us the first prize in the event which included the assignment to create the first digitized Dutch law on the blockchain.
Our token pre-sale starts on the 6th of December. For 24 hours, the pre-sale is open only for members. You can register to be whitelisted and participate in this members-only pre-sale. After the whitelist pre-sale, we'll continue with a public pre-sale.
We'll launch the LegalThings One platform as beta. All token holders will be able to use the platform. New content, like (live) model contracts will be added in the coming months.
All tokens represent the full capacity of the LegalThings One platform. During this sale we'll sell licenses (represented by LTO tokens) for the platform.
We'll publish the Live Contract syntax as open standards under the CC-BY-SA license. Software to run Live Contracts will be available under the MIT license. This will allow third-parties to to create and run Live Contracts without relying on LegalThings One.
To set precedence of the legality of data stored on the blockchain, we'll initiate trials in several countries. The following countries are candidates for these trials: United Kingdom, United States, India, Russia and the Netherlands.