16.1 Introduction
Technological advancements and cyberspace have forced us to reconsider the existing limitations of private autonomy. Within the field of contract law, according to regulatory strategies, the public dimension affects private interests in several ways. These include the application of mandatory rules and enforcement mechanisms capable of obtaining certain results and granting a sufficient level of effectiveness. This is particularly the case in European contract law, where the law pursues regulatory goals related to the establishment and the enhancement of a common European market.Footnote 1
The digital dimension represents a severe challenge for European and national private law.Footnote 2 In order to address the implications of the new technologies on private law, recent studies were conducted inter alia on algorithmic decisions, digital platforms, the Internet of Things, artificial intelligence, data science, and blockchain technology. The broader picture seems to indicate that, in the light of the new technologies, the freedom to conduct business has often turned into power. Digital firms are no longer only market participants: rather, they are becoming market makers capable of exerting regulatory control over the terms on which others can sell goods and services.Footnote 3 In so doing, they are replacing the exercise of states’ territorial sovereignty with functional sovereignty. This situation raised concern in different areas of law and recently also in the field of competition law.Footnote 4
As Lawrence Lessig pointed out, in the mid-1990s, cyberspace became a new target for libertarian utopianism where freedom from the state would reign.Footnote 5 According to this belief, the society of this space would be a fully self-ordering entity, cleansed of governors and free from political hacks. Lessig was not a believer of the described utopian view. He correctly pointed out the need to govern cyberspace, as he understood that left to itself, cyberspace would become a perfect tool of ‘Control. Not necessarily control by government.’Footnote 6 These observations may be connected to the topic of private authorities who exercise power over other private entities with limited control by the state. The issue was tackled in a study by an Italian scholar which is now more than forty years old,Footnote 7 and more recently by several contributions on different areas of private law.Footnote 8 The emergence of private authorities was also affirmed in the context of global governance.Footnote 9 These studies were able to categorize forms and consequences of private authorities, to identify imbalances of power, envisage power-related rules of law, and question the legitimacy of private power. One of the main problems is that private authorities can be resistant to the application and enforcement of mandatory rules.
The present chapter aims to investigate whether and how blockchain technology platforms and smart contracts could be considered a modern form of private authority, which at least partially escapes the application of mandatory rules and traditional enforcement mechanisms.Footnote 10 Blockchain technology presents itself as democratic in nature, as it is based on an idea of radical decentralization.Footnote 11 This is in stark contrast to giant Big Tech corporations working over the internet in the fields of social networking, online search, online shopping, and so forth; with blockchain, technology users put their trust in a network of peers. Nevertheless, as happened with the internet, market powers could create monopolies or highly imbalanced legal relationships.Footnote 12 In this sense, contractual automation seems to play a key role in understanding the potentialities and the risks involved in the technology. In general terms, one of the main characteristics of a smart contract is its self-executing character, which should eliminate the possibility of a breach of contract. But smart contracts may also provide for effective self-help against breaches of traditional contracts. Finally, when implemented on blockchain platforms, smart contract relationships may also benefit from the application of innovative dispute resolution systems, which present themselves as entirely independent from state authorities.
16.2 Smart Contracts: Main Characteristics
In his well-recognized paper entitled ‘Formalizing and Securing Relationships on Public Networks’, Nick Szabo described how cryptography could make it possible to write computer software able to resemble contractual clauses and bind parties in a way that would almost eliminate the possibility of breaching an agreement.Footnote 13 Szabo’s paper was just a first step, and nowadays basically every scholar interested in contract law may expound on the essentials of how a smart contract functions. Some jurisdictions, such as in Italy, have also enacted rules defining a smart contract.Footnote 14 The great interest is due to the growing adoption of Bitcoin and other blockchain-based systems, as for instance Ethereum.Footnote 15 The latter provides the necessary technology to carry out Szabo’s ideas.
Smart contracts do not differ too greatly from natural language agreements with respect to the parties’ aims or interests.Footnote 16 In reality, except where the decision to conclude the contract is taken by an ‘artificial intelligent agent’, they solely form a technological infrastructure that makes transactions cheaper and safer.Footnote 17 The main quality of a smart contract relies on the automation of contractual relationships, as the performance is triggered by an algorithm in turn triggered by the fulfilment of certain events. In this sense, there is often talk of a distinction between the notions of ‘smart contract’ and ‘smart legal contract’ with the result that contractual automation in the majority of cases affects only its performance.Footnote 18 In contrast, the contract as such (i.e., the legal contract) is still a product of the meetings of the minds, through an offer and an acceptance.Footnote 19 In many cases, this induces parties to ‘wrap’ the smart contract in paper and to ‘nest’ it in a certain legal system.Footnote 20
It is therefore often argued that ‘smart contract’ is a misnomer as the ‘smart’ part of the contract in reality affects only the performance.Footnote 21 In addition, smart contracts are not intelligent but rely on an ‘If-Then’ principle, which means, for instance, that a given performance will be executed only when the agreed-upon amount of money is sent to the system.Footnote 22 These critics seem to be correct, and this goes some way to demystifying the phenomenon,Footnote 23 which is sometimes described as a game-changer that will impact every contractual relationship.Footnote 24 Discussions are beginning to be held on automated legal drafting, through which contractual clauses are shaped on the basis of big data by machine learning tools and predictive technologies, but for now, they do not really affect the emerging technology of smart contracts on blockchain platforms.Footnote 25 The latter work is based on rather simple software protocols and other code-based systems, which are programmed ex ante without the intervention of artificial intelligence.Footnote 26
Nevertheless, the importance of the ‘self-executing’ and ‘self-enforcing’ character of smart contracts should not be undermined. Most of the benefits arising from the new technology are in fact based on these two elements, which represent a source of innovation for general contract law. The ‘self-executing’ character should eliminate the occurrence of contractual breaches, whereas the ‘self-enforcing’ character makes it unnecessary to turn to the courts in order to obtain legal protection.Footnote 27 In addition, the code does not theoretically require interpretation, as it should not entail the need to explain ambiguous terms.Footnote 28 Currently, it is not clear whether smart contracts will diminish transaction costs, due to the complexity of digital solutions and the need to acquire the necessary knowledge.Footnote 29 For reasons that will be outlined, costs of implementation seem not to harm the potential spread of smart contracts, especially in the fields of consumer contracts and the Internet of Things.
16.3 Self-Execution and Self-Enforcement
As stated before, through the new technology one or more aspects of the contract’s execution become automated, and having once entered into the contract, parties cannot prevent performance from being executed. Smart contracts use blockchain to ensure the transparency of the contractual relationship and to create trust in the capacity to execute the contract, which depends on the involved technology. As previously stated, the operation is based on ‘If-Then’ statements, which are one of the most basic building blocks of any computer program.
Undeniably, such a technology can easily govern the simple contractual relationship, in which the system has only to determine where a given amount of money has been paid in order to have something in return (e.g., a digital asset) or where the performance is due when certain external conditions of the real world are met. Since a modification of the contractual terms of a smart contract implemented on a blockchain platform is hardly possible, execution appears certain and personal trust or confidence in the counterparty is not needed.Footnote 30 This has led to the claim that in certain situations, contracting parties will face the ‘cost of inflexibility’, as blockchain-based smart contracts are difficult to manipulate and therefore resistant to changes.Footnote 31 In fact, smart contracts are built on the assumption that there will not be modifications after the conclusion of the contract. As a result, if or when circumstances relevant to the smart contract change, a whole new contract would need to be written.
‘Inflexibility’ is often considered a weakness of smart contracts.Footnote 32 Supervening events and the change of circumstances may require parties to intervene in the contractual regulation and provide for some amendments.Footnote 33 Therefore, legal systems contain rules that may lead to a judicial adaptation of the contract, sometimes through a duty to renegotiate its content.Footnote 34 In this regard, smart contracts differ from traditional contracts, as they take an ex ante view instead of the common ex post judicial assessment view of law.Footnote 35
In reality, this inflexibility does not constitute a weakness of smart contracts. Instead, it makes clear that self-execution and self-enforcement could bring substantial benefits only in certain legal relationships, where parties are interested in a simple and instantaneous exchange. Moreover, self-execution does not necessarily affect the entire agreement. Indemnity payouts, insurance triggers, and various other provisions of the contract could be automated and self-fulfilling, while other provisions may remain subject to an ordinary bargain and be expressed in natural language.Footnote 36 One can therefore correctly state that smart contracts automatically perform obligations which arise from legal contracts but not necessarily all the obligations. Finally, it should be observed that future contingencies that impact the contractual balance, as for instance an increase of the raw materials’ price, could be assessed through lines of code, in order to rationally adapt the contractual performance.Footnote 37
The latter issue makes clear that often the conditions for contractual performance relate to the real and non-digital world outside of blockchains. It is therefore necessary to create a link between the real world and the blockchain. Such a link is provided by the so-called oracles, which could be defined as interfaces through which information from the real world enters the ‘digital world’. There are different types of oracles,Footnote 38 and some scholars argue that their operation harms the self-executing character of smart contracts, because the execution is eventually remitted to an external source.Footnote 39 Due to the technology involved, oracles do not seem to impact the automated execution of smart contracts. The main challenge with oracles is that contracting parties need to trust these outside sources of information, whether they come from a website or a sensor. As oracles are usually third-party services, they are not subject to the security blockchain consensus mechanisms. Moreover, mistakes or inaccuracies are not subject to rules that govern breach of contract between the two contracting parties.
In the light of the above, self-execution and self-enforcement assure an automated performance of the contract. Nevertheless, whether due to an incorrect intervention of an oracle, for a technological dysfunction, or for an error in the programming, things may go wrong and leave contracting parties not satisfied. In these cases, there could be an interest in unwinding the smart contract. According to a recent study,Footnote 40 this can be done in three ways. Needless to say, the parties can unwind the legal contract in the old-fashioned way by refunding what they have received from the other party, be it voluntarily or with judicial coercion. At any rate, it would be closer to the spirit of fully automated contracts, if the termination of the contract and its unwinding could also be recorded in the computer code itself and thus carried out automatically.Footnote 41 Finally, it is theoretically possible to provide for technical modifications of the smart contract in the blockchain. The three options, as also argued by the author,Footnote 42 are not easily feasible and there is the risk of losing the advantages related to self-execution. It is therefore of paramount importance to devote attention to the self-help and dispute resolution mechanisms developed on blockchain-platforms.Footnote 43
16.4 Automated Self-Help
The functioning of smart contracts may also determine a new vast array of self-help tools (i.e., enforcement mechanisms that do not require the intervention of state power). The examples of self-help that have recently been discussed are related to Internet of Things technology.Footnote 44 The cases under discussion affect self-enforcement devices that automatically react in the presence of a contractual breach and put the creditor in a position of advantage with respect to that of the debtor. The latter, who is in breach, cannot exercise any legal defence vis-à-vis automated self-help based on algorithms. Scholars who addressed the issue stressed the dangers connected to a pure exercise of private power through technology.Footnote 45
Among the most frequent examples, there is the lease contract, for which a smart contract could automatically send a withdrawal communication in case of a two-month delay in the payment of the lease instalment. If the lessee does not pay the due instalment within one month, the algorithm automatically locks the door and prevents the lessee from entering into the apartment. Another example is the ‘starter interrupt device’, which can be connected to a banking loan used to buy a vehicle. If the owner does not pay the instalments, the smart contract prevents the vehicle from starting. Similar examples are present in the field of utilities (gas, electricity, etc.).Footnote 46 If the customer does not pay for the service, the utilities are no longer available. In looking to general contractual remedies, the potentiality of such self-help instruments appears in reality almost unlimited. Automation could also affect the payment of damages or liquidated damages.
Self-help devices take advantage of technology and put in the creditors’ hands an effective tool, which – at the same time – reduces the costs of enforcement and significantly enhances the effectiveness of contractual agreements. This is mainly due to the fact that recourse to a court is no longer necessary. Contractual automation may increase the awareness of the importance of fulfilling obligations in time. Moreover, the reduction of costs related to enforcement may lead to a decrease in prices for diligent contracting parties. At any rate, as correctly pointed out, the described ‘technological enforcement’ – although effective – does not necessarily respect the requirements set by the law.Footnote 47 In other words, even if smart contracts are technologically enforceable, they are not necessarily also legally enforceable.Footnote 48 In the examples outlined previously, it is possible to imagine a withdrawal from the contract without due notice or the payment of an exorbitant sum of money as damages.
How should the law react to possible deviations between the code and the law? It seems that a kind of principle of equivalent treatment should provide guidance to resolving cases:Footnote 49 limits that exist for the enforcement of traditional contracts should be extended to smart contracts. From a methodological point of view, practical difficulties in applying the law should not prevent an assessment of the (un)lawful character of certain self-help mechanisms. In cases where the law provides for mandatory proceedings or legal steps in order to enforce a right, the same should in principle apply to smart contracts.
Nevertheless, evaluation of the self-help mechanisms’ lawfulness should not be too strict, and should essentially be aimed at protecting fundamental rights – for instance, the right to housing. The ‘automated enforcement’ relies on party autonomy and cannot be considered as an act of oppression exercised by a ‘private power’ per se. Therefore, apart from the protected rights, the assessment should also involve the characteristics of the contracting parties and the subject matter of the contract. In this regard, it was correctly pointed out that EU law provides for some boundaries of private autonomy in consumer contracts, which apply to smart contracts.Footnote 50
For instance, the unfair terms directiveFootnote 51 indicates that clauses, which exclude or hinder a consumer’s right to take legal action, may create a significant imbalance in parties’ rights and obligations.Footnote 52 The same is stated with respect to clauses irrevocably binding the consumer to terms with which she or he had no real opportunity of becoming acquainted before the conclusion of the contract.Footnote 53 According to prevailing opinion, the scope of application of the unfair terms directive also covers smart contracts, even if the clauses are expressed through lines of code.Footnote 54
Undeniably, smart contracts may pose difficulties to consumers when it comes to exercising a right against illicit behaviour on behalf of the business. At any rate, it would not be proper to consider the self-help systems directly unlawful. The enforcement of EU consumer law is also granted by public authorities,Footnote 55 which in the future may exercise control with respect to the adopted contractual automation processes and require modifications in the computer protocol of the businesses. If the self-help reacts to a breach of the consumer, it should not in principle be considered unfair. On the one hand, contractual automation may provide for lower charges, due to the savings in enforcement costs. On the other hand, it could augment the reliability of consumers by excluding opportunistic choices and making them immediately aware of the consequences of the breach. Finally – as will be seen – technological innovation must not be seen only as a menace for consumers, as it could also provide for an improvement in the application of consumer law and, therefore, an enhancement of its level of effectiveness.Footnote 56
16.5 Automated Application of Mandatory Rules
A huge debate has affected the application of mandatory rules in the field of smart contracts. The risk that this innovative technology could be used as an instrument to fulfil unlawful activities, as the conclusion of immoral or criminal contracts, is often pointed out.Footnote 57 The mode of operation may render smart contracts and blockchain technology attractive to ill-intentioned people interested in engaging in illicit acts.
Among the mandatory rules that may be infringed by smart contracts, special attention is dedicated to consumer law.Footnote 58 The characteristics of smart contracts make them particularly compatible with the interests of individual businesses in business-to-consumer relationships, as blockchain technology can guarantee a high level of standardization and potentially be a vehicle for the conclusion of mass contracts. In terms of the application of mandatory consumer law to smart contracts, opinions differ significantly. According to one author, smart contracts will determine the end of consumer law, as they may systematically permit businesses to escape its application.Footnote 59 The claim has also been made that automated enforcement in the sector of consumer contracts amounts to an illusion, as mandatory rules prevent the use of automated enforcement mechanisms.Footnote 60
Both opinions seem slightly overstated and do not capture the most interesting aspect related to smart consumer contracts. In fact, as has been recently discussed, technology and contractual automation may also be used as a tool to enforce consumer law and augment its level of effectiveness.Footnote 61 Many consumers are indeed not aware of their rights or, even if they are, find it difficult to enforce them, due to emerging costs and a lack of experience. In addition, most consumer contractual claims are of insignificant value.
In this regard, a very good example is given by the EU Regulation on Compensation of Long Delay of Flights.Footnote 62 The consumer has a right to get a fixed compensation, depending on the flight length, ranging from 125,00 to 600,00 euros. For the reasons outlined previously, what often happens is that consumers do not claim compensation; the compensation scheme thus lacks effectiveness. In the interest of consumers, reimbursement through a smart contract device has been proposed to automate the process.Footnote 63 The latter would work on the basis of a reliable system of external interfaces.Footnote 64 The proposal seems feasible and is gaining attention, especially in Germany, where the introduction of the smart compensation scheme in cases of cancellations or delays of flights has been discussed in Parliament.Footnote 65
Two possible drawbacks are related to the described types of legislative intervention. Due to the wide distribution of the technology, which crosses national borders, the adoption of smart enforcement may produce strong distortions to international competition.Footnote 66 For instance, the imposition of a smart compensation model as the one discussed in Germany for the delay or the cancellation of flights may lead to an increase in the costs for flight companies that operate predominantly in that country. In order not to harm the aims of the internal market, smart enforcement should thus be implemented on a European level.
Another danger of the proposed use of smart contract devices is ‘over-enforcement’.Footnote 67 The latter may be detrimental because it could prevent businesses from running an activity in order to escape liability and sanctions. The described adoption of technology in cases of flight delays may determine a digitalization of enforcement that drastically drops the rate of unpaid compensations to almost zero. The outlined scenario is not necessarily convenient for consumers, as the additional costs sustained by flight companies would probably be passed on to all customers through an increase in prices. The level of technology required to automatically detect every single delay of an airplane, and grant compensation to the travellers would probably lead to an explosion in costs for companies. While this may increase efficiency in the sector, it is questionable whether such a burden would be bearable for the flight companies. That is not to say that this risk automatically means strict enforcement is inherently evil: enforcement of existing rules is of course a positive aspect. Nevertheless, the economic problems it may give rise to should lead to the consideration of enforcement through technological devices as an independent element that could in principle also require modifications of substantive law.Footnote 68 For instance, the technology could enable recognition of ‘tailored’ amounts of compensation depending on the seriousness of the delay.Footnote 69
Many aspects seem uncertain, and it is not surprising that as things stand, smart enforcement mechanisms are not (yet) the core of legislative intervention.Footnote 70 In reality, the current regulatory approach appears quite the opposite. Legislators are not familiar with the new technologies and are tending towards lightening the obstacles set by mandatory rules to blockchain technology with the aim of not harming its evolution.Footnote 71 In many legal systems, contained ‘regulatory sandboxes’ were created,Footnote 72 in order to support companies exercising their activities in the fields of fintech and blockchain technology. In general terms, regulatory sandboxes enable companies to test their products with real customers in an environment that is not subject to the full application of legal rules. In this context, regulators typically provide guidance, with the aim of creating a collaborative relationship between the regulator and regulated companies. The regulatory sandbox can also be considered a form of principles-based regulation because it lifts some of the more specific regulatory burdens from sandbox participants by affording flexibility in satisfying the regulatory goals of the sandbox.Footnote 73 The described line of reasoning shows the willingness of legislators not to prevent technological progress and to help out domestic companies. The approach inevitably brings clashes when it comes to the protection of consumers’ interests.Footnote 74
16.6 Smart Contracts and Dispute Resolution
Even if the claim ‘code is law’ or the expression ‘lex cryptographica’Footnote 75 may appear exaggerated, it seems evident that developers of smart contracts and blockchain platforms are aiming to create an order without law and implement a private regulatory framework. Achieving such a goal requires shaping a model of dispute resolution capable of resolving conflicts in an efficient manner, without the intervention of national courts and state power.Footnote 76 The self-executing character of smart contracts may not prevent disputes occasionally arising between parties, connected for instance to defects in the product purchased or to the existence of an unlawful act. Moreover, the parties’ agreement cannot always be encoded in ‘if-then’ statements and should be encompassed in non-deterministic notions and general clauses such as, for example, good faith and reasonableness. Unless artificial intelligence develops to the stage where a machine can substitute human reasoning in filling gaps of the contract or putting into effect general clauses,Footnote 77 contractual disputes may still arise. The way smart contracts operate could lead parties to abandon the digital world and resolve their disputes off-chain. The issue is of high importance, as the practical difficulties of solving possible disputes between the parties could obscure the advantages connected to contractual automation.Footnote 78
On this, one of the starting points in the discussions about dispute resolution in the field of blockchain is the observation that nowadays regular courts are not well enough equipped to face the challenges arising from the execution of lines of code.Footnote 79 This claim could perhaps be correct at this stage, but it does not rule out courts acquiring the capacity to tackle such disputes in the future. In reality, a part of the industry is attempting to realize a well-organized and completely independent jurisdiction in the digital world through the intervention of particular types of oracles, which are usually called ‘adjudicators’ or ‘jurors’.Footnote 80
Whether such a dispute resolution model can work strictly depends on the coding of the smart contract. As seen before,Footnote 81 once a smart contract is running, in principle neither party can stop the protocol, reverse an already executed transaction, or otherwise amend the smart contract. Therefore, the power to interfere with the execution of the smart contract should be foreseen ex ante and be granted to a trusted third party. The latter is allowed to make determinations beyond the smart contracts’ capabilities. It will feed the smart contract with information and, if necessary, influence its execution in order to reflect the trusted third parties’ determination.Footnote 82
Independence from the traditional judiciary is granted by ‘routine escrow mechanisms’. Rather than paying the sale price directly to the seller, the latter is kept in escrow by a third party. If no disputes arise from the contract, the funds held in escrow will be unblocked in favour of the seller.Footnote 83 Nowadays, platforms adopt sophisticated systems based on ‘multi-signature addresses’, which do not really give exclusive control of the price to the third party involved as an adjudicator.Footnote 84 This should amount to an additional guarantee in favour of the contracting parties.Footnote 85 The outcome is a kind of advanced ODR system,Footnote 86 which is particularly suitable in the high-volume, low-value consumer complaints market.Footnote 87
The autonomous dispute resolution system is not considered a modern form of the judiciary.Footnote 88 It is presented as a return to the ancient pre-Westphalian past, where jurisdiction did not usually emanate from state sovereignty but from a private service, largely based on the consent of the disputing parties. Nevertheless, given the development of the modern state judiciary, there are many problematic aspects related to dispute resolution on blockchain platforms. For instance, it has been pointed out that: the decision is granted by subjects who do not necessarily have a juridical knowledge (often selected through a special ranking based on the appreciation of users), the decision cannot be recognized by a state court as happens with an arbitral award, and that enforcement does not respect time limits and safeguards provided by regular enforcement proceedings.Footnote 89
With respect to the aforementioned issues, the fear is that such advanced ODR systems based on rules which are autonomous from the ones of national legal systems may limit the importance of the latter in regulating private relationships.Footnote 90 On the other hand, some authors affirm that such procedures, under certain conditions, may become a new worldwide model of arbitration.Footnote 91
Also, in this case, the advantages of the dispute resolution procedures are strictly connected to the self-enforcement character of the decision. The legitimacy of such proceedings must be carefully assessed; the outcome should not necessarily be considered unlawful. The parties voluntarily chose to be subject to the scrutiny of the adjudicator, and from a private law perspective, the situation does not differ significantly from the case of a third arbitrator that determines the contents of the contract. In addition, the scope of automated enforcement does not tackle the entire estate; the assets that are subject to the assignment decided by the adjudicator are made available by the parties on purpose. It is not yet clear how far such proceedings will spread or whether they could functionally substitute for state court proceedings. Needless to say, in the absence of a specific recognition made by legal rules, these dispute resolution mechanisms are subject to the scrutiny of state courts.Footnote 92 Although it could be difficult in practice, the party who does not agree with a decision, which is not legally recognizable, may sue the competent state court in order to have the dispute solved.
16.7 Conclusion
The actual dangers caused by the creation of private powers on blockchain platforms are related to the technology that grants automation of the contractual relationship. On the one side, if rights and legal guarantees are excluded or limited the adoption of self-enforcement devices should of course be considered unlawful. On the other side, however, in principle every situation has to be carefully assessed, as the contracting parties have freely chosen to enter into a smart contract.
Problems may exist when smart contracts are used as a means of self-help imposed by one of the contracting parties. An automated application of remedies may harm the essential interests of the debtors. Nevertheless, automation does not seem to infringe debtor’s rights if enforcement is compliant with deadlines and legal steps provided by the law. Moreover, some economic advantages arising from automation may produce positive effects for whole categories of users and self-enforcement could also become an efficient tool in the hands of the European legislator, in order to significantly augment the effectiveness of consumer protection.
In the light of the issues examined herein, if the technology wishes to augment user trust about the functioning of smart contracts and blockchain, it should not aim to abandon the law.Footnote 93 To be successful in the long run, innovative enforcement and dispute resolution models should respect and emulate legal guarantees. Smart contracts are not necessarily constructed with democratic oversight and governance, which are essential for a legitimate system of private law.Footnote 94 A widespread acceptance of new services requires that the main pillars on which legal systems are based should not be erased.