{
 "@context": "https://schema.org",
 "@type": "DefinedTerm",
 "@id": "https://wulfkaal.github.io/entities/legal-risk",
 "identifier": "kaal:entity:legal-risk",
 "name": "Legal risk",
 "termCode": "legal-risk",
 "inDefinedTermSet": {
  "@id": "https://wulfkaal.github.io/entities/index.json"
 },
 "author": {
  "@type": "Person",
  "name": "Wulf A. Kaal",
  "identifier": "https://orcid.org/0000-0003-0757-275X"
 },
 "dateModified": "2026-07-29",
 "canonicalForm": "https://wulfkaal.github.io/entities/legal-risk.md",
 "sha256": "2d6b52681e19f4eeec7039a4e8b2f08234c553f6d2c514e3db5f446c91eecc2e",
 "additionalProperty": [
  {
   "@type": "PropertyValue",
   "name": "status",
   "value": "derived"
  },
  {
   "@type": "PropertyValue",
   "name": "claim_count",
   "value": 5
  },
  {
   "@type": "PropertyValue",
   "name": "work_count",
   "value": 5
  },
  {
   "@type": "PropertyValue",
   "name": "year_span",
   "value": [
    "2017",
    "2023"
   ]
  },
  {
   "@type": "PropertyValue",
   "name": "non_current_claims",
   "value": 0
  }
 ],
 "subjectOf": [
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/2939127-026",
   "identifier": "kaal:claim:2939127-026",
   "text": "Because the legal origin of smart contracting is unsettled, lawyers may argue that smart contracts are void and unenforceable under the law even where the smart contract accurately reflects the parties' underlying agreement.",
   "abstract": "While smart contracts may reflect the underlying contract between parties, lawyers may argue that \"smart contracts\" are void and unenforceable under the law.",
   "citation": "Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Legal Education in the Blockchain Revolution (2017). SSRN: https://ssrn.com/abstract=2939127",
   "datePublished": "2017",
   "claim_type": "failure",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [
    "smart contracts assessed under existing contract law doctrine"
   ],
   "source_pdf_sha256": "abcef529c7200261c59eec43018375b3b26e3186239fb9d002bacc298dba26ff",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3071378-009",
   "identifier": "kaal:claim:3071378-009",
   "text": "Even where a smart contract reflects the underlying bargain between the parties, lawyers may argue that smart contracts are void and unenforceable under the law.",
   "abstract": "While smart contracts may reflect the underlying contract between parties, lawyers may argue that \"smart contracts\" are void and unenforceable under the law.",
   "citation": "Wulf A. Kaal, Blockchain Technology and Race in Corporate America (2017). SSRN: https://ssrn.com/abstract=3071378",
   "datePublished": "2017",
   "claim_type": "failure",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [
    "existing contract law doctrine applied to code-based agreements"
   ],
   "source_pdf_sha256": "125f01674d13b6bb0310c4be7a20ff538dccbc36ecf352770b3c580028387edd",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3799320-008",
   "identifier": "kaal:claim:3799320-008",
   "text": "If DAO members do not formalize a legal structure for their entity, courts are very likely to impose one on them, which is a serious risk of DAO membership.",
   "abstract": "However, a very serious risk is associated with DAO membership in the sense that if the DAO members do not formalize a structure for their human-created entity, courts are very likely to impose one for the members of the DAO.",
   "citation": "Wulf A. Kaal, A Decentralized Autonomous Organization (DAO) of DAOs (2021). SSRN: https://ssrn.com/abstract=3799320",
   "datePublished": "2021",
   "claim_type": "predictive",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [
    "DAOs with no off-chain legal entity",
    "litigation reaching a court"
   ],
   "source_pdf_sha256": "c3dff852f2d3f04718c829a24189309a7db4d92d84f6045d3d4f562d87c03e63",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3936876-003",
   "identifier": "kaal:claim:3936876-003",
   "text": "Without the ability to rely on proven custody providers, mainstream and legacy institutional investors are restrained from making digital asset investments for legal or business reasons.",
   "abstract": "Without the ability to rely on proven custody providers, mainstream and legacy institutional investors are restrained from making digital asset investments for legal and / or business reasons.",
   "citation": "Wulf A. Kaal, Hayley Howe, Custody of Digital Assets (2021). SSRN: https://ssrn.com/abstract=3936876",
   "datePublished": "2021",
   "claim_type": "condition",
   "confidence": "asserted",
   "is_failure_mode": true,
   "scope_conditions": [
    "applies to mainstream and legacy institutional investors"
   ],
   "source_pdf_sha256": "9bc0903d01910460298e754c451f027df4324367359800a98ee8e638d94aff55",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/4529715-017",
   "identifier": "kaal:claim:4529715-017",
   "text": "DAOs without effective governance structures and policies risk violating local laws and regulations, exposing themselves to legal and regulatory consequences.",
   "abstract": "Furthermore, DAOs that do not have effective governance structures and policies may be at risk of violating local laws and regulations, which can lead to legal and regulatory consequences.",
   "citation": "Wulf A. Kaal, Josh Bykowski, Decentralized Autonomous Organizations (DAO) – A Market Meta Analysis (2023). SSRN: https://ssrn.com/abstract=4529715",
   "datePublished": "2023",
   "claim_type": "failure",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [],
   "source_pdf_sha256": "2d71961e8c449afbeaf45ca4f53de8a575d45c77d6960b767d3d1d0874f296b5",
   "status": "current"
  }
 ],
 "description": "5 claims in the published works of Wulf A. Kaal carry the concept tag 'legal-risk'. Derived node: a roster, not an adjudicated definition."
}