According to a paper published by the Harvard Law School Forum on Corporate Governance on Smart Contracts and Their Limitations, in order to determine whether contracts are legally binding, we must first understand the difference between an agreement and a contract.

While two parties can enter into a variety of agreements, most English-speaking jurisdictions recognize that a contract is a legally binding agreement that can be enforced in a court of law. However, in order for a contract to be legally enforced, the courts must first determine whether the common law thresholds of offer, acceptance, and consideration have been met. Fortunately, these fundamental requirements can be met with ancillary smart contracts.

Smart contracts are computer programs that automatically execute and enforce the terms of a contract when predefined conditions are met. The question of whether smart contracts are legally binding depends on the jurisdiction and the specific circumstances surrounding their creation and execution. In many cases, traditional legal frameworks may not explicitly address smart contracts, leading to uncertainties.

However, as blockchain technology and smart contracts become more prevalent, legal systems are adapting to recognize and accommodate their validity. Courts and legislators are working to establish precedents and regulations that clarify the legal standing of smart contracts. Some jurisdictions recognize smart contracts as enforceable agreements, while others may require additional legal documentation or validation.

Ultimately, the legal binding nature of smart contracts is evolving, and their acceptance and enforceability depend on the legal landscape and the willingness of legal systems to adapt to emerging technologies. It is advisable to seek legal advice to ensure compliance and clarity when dealing with smart contracts in various jurisdictions.