Ohio may become the latest U.S. state to legally recognize smart contracts and records stored on a blockchain, according to a newly proposed law.
Senate Bill 300, introduced by Senator Matt Dolan, amends sections of the Uniform Electronic Transactions Act to include blockchain records and smart contracts as electronic records. Further, the bill allows for smart contracts to be legally enforceable as any other contract may be.
If passed, the bill would add language stating that blockchain technology can be used to store electronic information and provide ownership rights. It specifically states:
“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 proposed bill went on to state: “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.”
Perhaps more notably, the bill amends language in another section about electronic contracts to include that “smart contracts may exist in commerce.”
It goes one step further, however: while existing law already states that “a contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation,” S.B. 300 adds “or because the contract contains a smart contracts term,” making it clear that smart contracts may be used for legal documents.
If signed into law, Ohio would join Arizona, and possibly California, Florida and Tennessee, among other states, in recognizing both blockchain transactions and smart contracts for electronic records.