What do you do if you encounter a dispute over smart contract execution in the Web3 field?

Smart contracts are self-executing agreements that run on a blockchain, such as Ethereum or Binance Smart Chain. They are designed to reduce intermediaries, enhance transparency, and enforce rules without human intervention. However, smart contracts are not immune to disputes, errors, or malicious attacks. In this article, you will learn what to do if you encounter a dispute over smart contract execution in the Web3 field.

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1 Identify the cause of the dispute

The first step is to identify the cause of the dispute. Is it a technical issue, such as a bug, a hack, or a network failure? Is it a legal issue, such as a breach of contract, a fraud, or a regulation violation? Is it a human issue, such as a misunderstanding, a disagreement, or a miscommunication? Depending on the cause, you may need different approaches to resolve the dispute.

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Roland Amoussou

Partner at Vovan Trocadelyo Group, Open to international arbitration counsel and arbitrator mission in Thailand and globally
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I agree but there should be no dispute in smart contract execution to begin with! If the terms of the contract are correctly set in the coding the execution shall be flawless. If a dispute still arises then determining the cause would be critical and requires identifying its nature. At this stage it would be constructive to explore direct negotiation, or smart contract audit.

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Austin Heaton

Head of Content - Web3 | Crypto Payroll
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If there's a dispute over smart contract execution in the Web3 field, first, carefully review the contract terms and conditions. Then, consider seeking mediation or arbitration through reputable platforms or legal channels specialized in blockchain disputes. Transparency, documentation, and open communication are crucial throughout the resolution process.

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2 Check the contract code and terms

The next step is to check the contract code and terms. Smart contracts are written in programming languages, such as Solidity or Vyper, that define the logic and conditions of the agreement. You should review the code and verify its functionality, security, and correctness. You should also check the terms of the contract, such as the parties, the obligations, the outcomes, and the penalties. You should make sure that the contract code and terms are consistent, clear, and fair.

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Roland Amoussou

Partner at Vovan Trocadelyo Group, Open to international arbitration counsel and arbitrator mission in Thailand and globally
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I totally agree! It is important to thoroughly reviewing the smart contract code and its documentation. Often, the terms of the contract and how it's supposed to function are clearly defined, which might help in understanding the nature of the dispute. For example does the language used for the coding capture the essence of the contract and the expectation of the Parties? Coding inaccuracies are technical issues that must be resolved technically.

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3 Communicate with the other party

The third step is to communicate with the other party. Smart contracts are based on trust and cooperation, so you should try to reach out to the other party and explain your position, concerns, and expectations. You should also listen to their perspective and understand their motivations, goals, and challenges. You should aim to find a common ground and a mutually beneficial solution.

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Roland Amoussou

Partner at Vovan Trocadelyo Group, Open to international arbitration counsel and arbitrator mission in Thailand and globally
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All dispute resolution must start by an attempt to resolve the issue through direct communication with the other party involved in the contract. Assuming that there is no misrepresentation, sometimes, misunderstandings or misinterpretations of the offer or acceptance in the contrat contract terms can be cleared up without needing to escalate the issue. Good and effective communication are very important.

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4 Use a dispute resolution mechanism

The fourth step is to use a dispute resolution mechanism. If you cannot resolve the dispute by communication, you may need to use a third-party service or platform that can help you settle the conflict. There are different types of dispute resolution mechanisms, such as arbitration, mediation, or voting. Some examples of Web3 platforms that offer dispute resolution services are Kleros, Aragon Court, or OpenLaw.

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5 Learn from the experience

The fifth step is to learn from the experience. Disputes over smart contract execution can be costly, stressful, and damaging. You should try to avoid them in the future by improving your skills, knowledge, and practices. You should also document the dispute and its resolution, and share your insights and feedback with the Web3 community. You should use the experience as an opportunity to grow and innovate.

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6 Stay updated and informed

The sixth step is to stay updated and informed. The Web3 field is constantly evolving and changing, with new technologies, standards, and regulations emerging every day. You should keep track of the latest developments and trends, and adapt your smart contracts accordingly. You should also follow the best practices and guidelines of the Web3 community, and participate in its governance and collaboration. You should be proactive and prepared for any potential disputes over smart contract execution.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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What do you do if you encounter a dispute over smart contract execution in the Web3 field?

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1 Identify the cause of the dispute

2 Check the contract code and terms

3 Communicate with the other party

4 Use a dispute resolution mechanism

5 Learn from the experience

6 Stay updated and informed

7 Here’s what else to consider

Web3

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What do you do if you encounter a dispute over smart contract execution in the Web3 field?

1

2

3

4

5

6

7

1 Identify the cause of the dispute

2 Check the contract code and terms

3 Communicate with the other party

4 Use a dispute resolution mechanism

5 Learn from the experience

6 Stay updated and informed

7 Here’s what else to consider

Web3

Rate this article

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