Smart Contracts in Light of Sharia Objectives and Jurisprudential Rules

Abstract

This research aims to introduce smart contracts, determine their legal characterization and Islamic jurisprudential ruling, based on a comparison of their advantages and disadvantages in light of Sharia objectives and jurisprudential principles. The researcher has adopted the following methodologies: historical, descriptive-analytical, and comparative. The research is divided into three sections:

• Section One: Smart Contracts and Blockchain: Origin, Definition, and Stages of Contract Creation.
• Section Two: Advantages and Disadvantages of Blockchain and Smart Contracts and Their Applications.
• Section Three: The legal nature of the smart contract, the expression of will in it, its characterization, and its jurisprudential ruling.

The research findings indicate that blockchain is the foundation of smart contracts and that they possess several advantages that align with certain Sharia objectives, such as the preservation of wealth, and comply with several jurisprudential principles. However, some of their disadvantages, such as their significant energy consumption leading to air pollution that threatens life on Earth and their lack of oversight by responsible authorities, necessitate efforts to address these issues to strengthen the argument for their permissibility.