What Are the Primary Legal Ambiguities When Translating Traditional Financial Agreements into Smart Contracts?

A primary legal ambiguity is the uncertain legal status and enforceability of smart contracts themselves, as they may not fit neatly into existing legal frameworks for contracts. Translating the nuances and subjective clauses of traditional agreements into rigid, deterministic code is challenging, leaving little room for interpretation or dispute resolution.

Determining jurisdiction in cross-border transactions executed by a decentralized network is another significant hurdle. Finally, assigning liability when a smart contract fails due to a bug or external data error remains a largely unresolved legal question.