The Feasibility of Smart Contract Formation as a Legally Valid Contract: A Comparative Study in Iranian and Swiss Law

Document Type : Research Paper

Authors

1 Professor at the Department of Private Law, Faculty of Law and Political Science, University of Tehran, Tehran, Iran

2 Assistant Professor at the Department of Private Law, Faculty of Law and Political Science, Kharazmi University, Tehran, Iran

3 PhD Student in the Department of Private Law, Faculty of Law and Political Science, Kharazmi University, Tehran, Iran

10.22059/jcl.2025.384842.634694

Abstract

A smart contract is a computer program in which virtual or physical assets are exchanged for cryptocurrencies upon the fulfillment of mutually agreed conditions, verified by artificial intelligence, and automatically executed. Different legal systems have varying opinions on whether a smart contract qualifies as a legal contract. This research addresses this question by analyzing the legal concept of contracts in Iranian and Swiss law and exploring the various forms of these transactions. It seems that distinguishing whether the parties' mutual agreement precedes the smart contract or vice versa is crucial. In the former case, the smart contract is not considered a legal contract, whereas in the latter, it is classified as a legal contract and subject to general contract rules. Moreover, specific elements such as digital signatures and the use of cryptocurrencies in smart contracts differ from traditional contracts. The advantages of these contracts depend on the inclusion of provisions recognizing smart contracts, along with the specific conditions for their formation, such as the use of digital signatures in the Electronic Commerce Code. Additionally, provisions should recognize cryptocurrencies and outline the formalities for obtaining ownership of these currencies in the Monetary and Banking Code, as proposed in this research.

Keywords

Main Subjects

References

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Comparative Law Review
Volume 16, Issue 2 - Serial Number 32
Autumn & Winter 2025
December 2025
Pages 695-716

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