Introducing the Accord Project: “The future of law will be revolutionized by legaltech”
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We’ve been so focused on the benefits blockchain has on the finance sector that we’ve forgotten about the legal industry. Enter the Accord Project, the world’s first consortium for smart legal contracts. It’s worth your attention because it seems to be the place where legal and tech come together. We invited Peter Hunn and Houman Shadab, founders of Clause.io to tell us more about the Accord Project and the aim of this initiative.
“Clause, with support from leading law firms and other organizations, including Linux Foundation’s Hyperledger, the International Association for Commercial and Contract Management (IACCM) and Clio, has launched the Accord Project to develop open source technology and standards for computational contracting,” according to the post announcing the initiative.
Brian Behlendorf, Executive Director at Hyperledger has stated that the Accord Project is “is an industry first that will facilitate the setting of much needed technical and legal standards for smart/computable legal contracts. The work that they [Clause] are doing in changing the nature of the contract using distributed ledger and other technologies will be greatly advanced with this initiative.”
We caught up with Clause co-founders Peter Hunn and Houman Shadab to talk about the Accord Project and the set of open source software development tools which will be established.
JAXenter: What is the Accord Project and how did it come into being?
Peter Hunn and Houman Shadab: The Accord Project is the world’s first consortium for smart legal contracts. We enable law firms, corporates, trade associations, and the like to come together to resolve issues and come to the standards necessary to make the next wave of commercial technology — computable contracting — a practical reality.
JAXenter: What needs does the Accord Project address?
Peter Hunn and Houman Shadab: The Accord Project addresses three core needs:
(a) the need for legal standards in the new paradigm of computable contracting;
(b) the need to address the unique legal issues that arise in computable contracting;
(c) the need for technical open-source tools that will enable users to build contracts that fit this new paradigm that embody these standards, as well as interfacing with other technologies in what we call the ‘Contract Stack’.
JAXenter: We’ve been so focused on the benefits emerging technologies have on the finance sector that we’ve forgotten about the legal industry. How can we create industry defining standards?
Peter Hunn and Houman Shadab: We do this by bringing together the stakeholders involved in legal industry: from law firms to corporates and enterprises to trade associations and other standards bodies. This is the purpose of the Accord Project. It is why we have partnered with leading law firms and the IACCM. We also consider it vital that other stakeholders are involved – particularly technologists.
The future of law will be revolutionized by legaltech; we have seen that with the rise of AI, and we are seeing it now with contracting and transactional technologies. Our partnerships with Hyperledger, the Linux Foundation, and Clio bring that to the table.
JAXenter: Blockchain-based “smart contracts” are on everyone’s lips these days but how can they gain widespread adoption?
Peter Hunn and Houman Shadab: It depends on the sense through which you view “smart contracts”. It is, unfortunately, a term that is a bit of a misnomer — which is well known, and a bit trite now. A “blockchain-based smart contract” is not necessarily a legal contract and it may have no real ramifications (as in the case of dApps).
This can perhaps best be seen as an extension of the Hyperledger Project into the legal sphere.
Accord and Clause are addressing smart legal contracts; of which distributed ledger “smart contracts” are one piece of the stack, but not — in our view — the whole thing. Our belief is that in order to gain widespread adoption they need to be: (a) easy to use; (b) secure; (c) technically suitable (address privacy and scalability issues); and (d) used within a generally accepted framework. This is what really underlines the need for the Accord Project.
JAXenter: What is the difference between blockchain-based smart contract initiatives and the Accord Project?
Peter Hunn and Houman Shadab: As mentioned above, a legal contract and a “blockchain smart contract” are not necessarily the same thing. The Accord Project can be seen as providing the necessary infrastructure and technologies for smart legal contracts (of which “blockchain-based smart contracts” are certainly a part). This can perhaps best be seen as an extension of the Hyperledger Project into the legal sphere. ‘Blockchain smart contracts’ are a part of the future of legal contracts — not necessarily the start and end.
JAXenter: The Accord Project will establish a set of open source software development tools — could you give us some examples?
Peter Hunn and Houman Shadab: Examples include SDKs to build contracts, a domain specific language for smart legal contracts (that is specific to the needs of legal contracts), and plans for other open-source software as part of the Contract Stack.
Our view is that you need a specific legal language for smart legal contracts whereas a JS-like language (e.g. Solidity) may be fine for dApps.
Peter Hunn and Houman Shadab: It depends on the use case; but not ‘perfect’. It has the benefit of being a very simple language in widespread use. But being untyped means there are few (or any) guarantees that the data you are working with is accurate.
It also comes back to this distinction between “smart legal contracts” (which may have a blockchain component) and “blockchain smart contracts” that are entirely on-chain and may not (as mentioned) be a legal contract, and thus (in respect to the former) as to what you want to do with it. Our view is that you need a specific legal language for smart legal contracts whereas a JS-like language (e.g. Solidity) may be fine for dApps.
Read more about the Accord Project here.