A recently proposed law could see Ohio become the latest US state to legally recognize smart contracts and records stored on a blockchain.
Senator Matt Dolan (OH Rep) introduced Senate Bill 300. It aims to amend sections of the Uniform Electronic Transactions Act so that it will include blockchain records, smart contracts, and electronic contracts. In addition, the bill also allows for smart contracts to become legally enforceable, like any other type of contract.
If the bill passes, it would add a provision stating that blockchain technology can be used to store electronic information and provide legal ownership rights. The bill specifically states that:
“Notwithstanding any other law, a person that, in or affecting interstate or foreign commerce, uses blockchain technology to secure information that the person owns or has the right to use retains the same rights of ownership or use with respect to that information as before the person secured the information using blockchain technology.”
The bill also states that:
“This division does not apply to the use of blockchain technology to secure information in connection with a transaction to the extent that the terms of the transaction expressly provide for the transfer of rights of ownership or use with respect to that information.”
And most notably, the bill also amends another section about electronic contracts to include that smart contracts may exist in commerce.
The bill also goes one step further: Most existing laws state that “a contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation,” And SB 300 goes on to add “or because the contract contains smart contracts term,” thereby making it very clear that smart contracts may be used for legal documents.
If Ohio’s State Senate passes SB 300 into law, Ohio would be joining Arizona, and quite possibly California, Florida, and Tennessee. Among other states, in recognizing blockchain transactions and smart contracts legally.