The Validity of Blockchain-Based Smart Contracts as Agreements from the Perspective of the Indonesian Civil Code

Abstract

The development of blockchain technology has given rise to innovations in digital transaction systems in the form of smart contracts, namely electronic contracts based on programming code that are capable of automatically executing the contents of agreements without the involvement of third parties. This study analyzes the validity of smart contracts as agreements under the Indonesian Civil Code, evidentiary mechanisms, breach of contract, and legal protection for the parties. This normative legal research applies a statutory approach through an examination of the Civil Code, the Electronic Information and Transactions Law, and literature concerning blockchain and smart contracts. The study finds that smart contracts may be recognized as valid agreements provided they satisfy Article 1320 of the Indonesian Civil Code: consent, legal capacity, a specific object, and a lawful cause. However, their use faces challenges, including coding errors, user anonymity, electronic evidence, legal liability, and dispute jurisdiction. Specific regulations on smart contracts and blockchain are therefore necessary to ensure legal certainty, legal protection, and appropriate dispute-resolution mechanisms for modern digital transactions in Indonesia