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How Does the Concept of ‘Code Is Law’ Apply to a Bug in a Derivatives Smart Contract?

The contract executes exactly as coded, even if flawed, making the resulting (bugged) transaction valid and irreversible on the immutable ledger.
Greeks.Live08.11.25

How Does the Concept of ‘Code Is Law’ Apply to a Bug in a Derivatives Smart Contract?

'Code is law' means the smart contract's code dictates the terms and execution, overriding any external legal or human interpretation. If a bug exists, the contract will execute the flawed code, potentially leading to unintended loss of funds, and the blockchain will record the transaction as valid.

The immutability of the chain means the flawed transaction cannot be easily reversed, highlighting the need for rigorous auditing before deployment.

What Is the Risk of a Bug in a Smart Contract Compared to a Clause in a Traditional Contract?
What Are the Security Implications of an Immutable, Flawed Smart Contract?
What Happens If There Is a Bug in a Smart Contract’s Code?
What Happens If There Is a Bug or Exploit in a Smart Contract’s Code?

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