Physical goods cannot be fully governed by code, so contracts requiring tangible performance need external mechanisms to verify compliance, and smart contracts may therefore fail to satisfy the consideration requirement in such contexts.
Source quote, verbatim
Unlike digital assets, physical goods cannot be fully governed by code, requiring external mechanisms to verify compliance with contractual terms. This limitation suggests that smart contracts may struggle to fulfill the consideration requirement in contexts requiring tangible performance,
From
Furrer Andreas, Wulf A. Kaal, Universal Digital Law Codex (UDLC) Building the Legal Infrastructure for the Digital Era (2025), 2.1.2 Consideration and Economic Viability, p. 7 https://ssrn.com/abstract=5554218 · source PDF
Cite as
Furrer Andreas, Wulf A. Kaal, Universal Digital Law Codex (UDLC) Building the Legal Infrastructure for the Digital Era (2025). SSRN: https://ssrn.com/abstract=5554218
Holds when
sales contracts requiring transfer of physical possession
contracts involving tangible rather than purely digital assets
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