Legal Prose Usage Corda

Question

It's a follow up question on previously answered legal prose question by Joel.(created separate question on request)

@LegalProseReference(uri = "foo.bar.com/my-legal-doc.html")
public class MyContract implements Contract {
    @Override
    public void verify(LedgerTransaction tx) {
        // Contract logic.
    }
}

As the answer suggests, I got this legal doc my-legal-doc.html. so what happens in case the verify method doesn't throw an exception? and what happens in case verify does throw an exception do I show this legal doc to the user that read this legal doc. That this is why the contract failed? as mentioned in answer legal contract takes precedence-> so if verify method throws exception then how does legal doc takes precedence? I go through this doc find what's wrong and manually verify the tx? also how manually?

Answer 1

Ideally, the contract code and the legal prose should be in perfect alignment. They should be identical, except that one expresses the contract in code, and the other expresses the contract in legal terms.

However, suppose you find that there is a bug in the contract code that means that the contract code doesn't actually fully reflect the legal prose. The idea is that you could use the legal prose document in a court of law to have the transaction reversed, on the basis that you were actually entering into an agreement on the basis of the legal prose document, and this document was not correctly reflected in the contract code.

For example, suppose you discover that a bug in the AssetContract governing AssetStates allowed counterparties to transfer themselves your assets without your agreement (in practice, we'd expect the contract code bugs to be less obvious than this). You could go to court and use the legal prose document to prove that this was a bug in the contract, rather than its true intent.

However, it's ultimately up to the individual countries' legal systems whether the contract code or legal prose takes precedence. Currently, we'd expect the legal prose to define the terms of the contract. This may change in the future as courts become more comfortable with the idea of code-as-law.