In the era of smart contracts, lawyers will still have plenty of work ensuring the devs get the code right. Many people expect that formal written contracts, and the lawyers that draft them, will be obsolete.
It is presumed that the agreed-upon term sheet will be simply given to a software developer to convert into smart contract computer code. That code will be the final agreement.
But what does a software developer know about drafting code to implement a traditional term sheet? The negotiating parties know their deal, and the lawyers know the applicable law and the customary terms, but the software developer does not. A traditional term sheet is not enough.
A “smart term sheet” is needed to bridge the information gap between the agreed-upon business terms and the smart contract coding process. It can: specify the practical details necessary for implementing the agreed-upon terms, identify and address the terms that cannot be implemented in a smart contract, and add the “boilerplate” legal terms.
In short, the practical and legal hurdles to implementing a term sheet can be overcome.
(Original publication on CoinDesk.com , 9 December)