# kaal:claim:5554218-022

**Claim.** Automating smart contracts under the code is law paradigm incentivizes unethical behavior by enabling anonymous, opportunistic action, which reduces repeat business and undermines the minimization of transaction costs.

**Type.** mechanism  **Support.** argued

**Holds when.**

- anonymous or pseudonymous counterparties
- automated execution with no external legal recourse

**Source quote.**

> The automation of smart contracts under "code is law" incentivizes unethical behavior by enabling anonymous, opportunistic actions, reducing repeat business and undermining transaction cost minimization.

**From.** Furrer Andreas, Wulf A. Kaal, *Universal Digital Law Codex (UDLC) Building the Legal Infrastructure for the Digital Era* (2025), 5.1 Automation in Code is Law, page 31

**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

**Verify.** sha256 of source PDF `55738b4035a91b70aa2ddaa127552fe4b373ec641afee2719fbdcabebdcbea44` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Andreas%20and%20Kaal%20-%202025%20-%20Universal%20Digital%20Law%20Codex%20%28UDLC%29%20Building%20the%20Legal%20Infrastructure%20for%20the%20Digital%20Era.pdf

**Failure mode.** Anonymity driven opportunism raises transaction costs  (family: sybil-and-identity-attack)

**Topics.** smart-contracts, economics

**Keywords.** code-is-law, opportunism, transaction-costs, anonymity, repeat-business

**Related claims.**

- contests: https://wulfkaal.github.io/claims/3405401-005
- extends: https://wulfkaal.github.io/claims/3782203-022
- contests: https://wulfkaal.github.io/claims/3405401-007
- contests: https://wulfkaal.github.io/claims/3405401-006

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