Smart Clauses for Digital, Legal Agreements

Mar 17 · 6 min read

With OpenLaw, you can issue purely digital, legal-enforceable assets with no coding necessary. Our latest collection of contractual clauses can be stacked together like “legal legos” to execute complex legal and financial transactions involving blockchain technology.

Assets exist and power this world because there are clear terms, embodied in legal agreements, which bring each asset’s rights and obligations to life. So far, however, this has been a half-life under the practices of our collective legal and accounting systems. The same goes for the world of digital assets. In order to give any digital asset real-world significance, the rights and obligations must be memorialized in natural language.

The advent of trust technology that uses cryptography and distributed databases to securely store data to represent currencies and other digital assets, with fidelity, have now opened radical opportunities for legal drafting on computable terms that can execute and settle financial objectives. Early prototypes on OpenLaw have demonstrated how anyone can use code to help execute their business obligations with code, scripting financial settlement on public blockchains like Ethereum.

OpenLaw has now refined our tools to allow anyone, both coders and non-coders, to go even further and farther. Using OpenLaw, you now can do what banks and other agents cannot: issue high-fidelity, purely digital, legal-enforceable assets that can be fractionalized and plugged into computable strategies. This allows parties to settle automatically in complex transfers, such as making payments to entire workforces, anywhere in the world, with a single signature on a simple legal template.

This isn’t sci-fi. This kind of legal engineering has become easier than ever using OpenLaw software. Iterating on development and research over the last year, we can now seamlessly remix traditional (‘dumb’) contracts into smart, yet deceptively simple “legal legos” that computers can read and act on, exactly as stated, in prose even the most conservative judge can understand. Legal commitments stored and programmed in this manner are ideal assets, as they can interact in online marketplaces and move between borders as seamlessly as email, with predictable actions on state changes.

Today, we are introducing OpenLaw’s‘Smart Clauses,’ a curated set of templates, to make this new standard in legal drafting approachable, while protecting the rights and obligations of digital assets.

Computable Legal Assets

A short clip shows how Smart Clauses can be combined to document terms and split a digital dollar five ways in one transaction

Squared at these fundamentals and applying them to the legal realm, OpenLaw has been hard at work constructing standard methods on Ethereum and software to deploy and manage digital assets related to any conceivable legal agreement, “Computable Legal Assets” (“CLA”). In the earlier days of formulating compatible legal and code scripts, CLAs were largely the domain of experts, or produced to order by teams of lawyers and coders for narrow use cases on closed systems.

Now, after recent upgrades to our public template library and Ethereum blockchain interfaces, we have compressed this exotic scripting process and made it far more accessible: in mere minutes, and today, anyone can use OpenLaw to take their traditional agreements and turn them into living CLAs that execute exactly as programmed without needing to learn how to code or even markup legal terms.

Fully integrated, the Ethereum blockchain serves to further optimize the performance of OpenLaw agreements from day one, by not only allowing our users to have a common source of truth about executed commitments, but to also have distributed, durable financial and accounting programs for these assets. As demonstrated further below, due to their computable nature, CLAs themselves serve to execute financial obligations without banks or other deal intermediaries, drastically lowering legal transaction costs.

To name a few useful OpenLaw CLA protocols that have been refined for everyday business use cases or PET protocols:

  • Payments in any digital token to satisfy the transfer of goods or services, in a lump sum, batches, to many addresses in one transaction and/or on a schedule;
  • Escrows of ether or digital tokens with release logic programmed by underlying agreements and with related protocols for on-chain arbitration; and
  • Tokenization of securities or commodities as security (ERC-1404/2222) and/or standard (ERC-20) digital tokens with integrated legal record stamps. Unsurprisingly, these issued assets can also be wired into Payments and Escrows on OpenLaw.)

In the past, OpenLaw and its energetic community have birthed many of these digital assets, protocols and methods, and our public library holds a range of legal and business programming templates, from basic employment agreements to long-form Delaware incorporation documents, with many samples of business-ready Ethereum integrations.

Ahead of the launch of The LAO, OpenLaw boasts a roster of curated CLA components for our public library (“smart clauses”). While anyone can still build their own CLAs from scratch using our template markup for legal prose and Ethereum smart contract calls, OpenLaw Smart Clauses make such advanced legal engineering for common deal patterns utterly accessible.

Imagine typing no more than a word to execute a smart contract transaction. For example, just typing ‘Money’ to transform your typical Asset Purchase Agreement into a template that sends digital dollars anywhere in the world to settle payment obligations. It’s literally that simple, and no hard coding necessary.

Legal engineering in this fashion is not only apparent, possible, but highly probable — especially since it doesn’t require a CS degree.

Smart Clauses Library

Our starter list of Smart Clauses for CLAs on the OpenLaw public library is briefly illustrated below. We have also included hyperlinks to the base templates that are maintained, audited, and rapidly upgraded in the public community library. Among other benefits, using Smart Clauses for deal drafting allows users to have confidence that they are using the latest standards in legal and code scripts on the market.

To begin, just combine a legal prose clause, such as:

with any of the following Smart Clauses to get started creating a smart legal agreement that executes on the Ethereum blockchain:


We have created the following Smart Clauses to invoke payments in stable digital tokens, including tokens that accrue interest passively using other protocols:


[[Money: Clause(“Pay DAI”)]]

[[Money: Clause(“Pay USDC”)]]


[[Money: Clause(“Pay CHAI”)]]


[[Money: Clause(“Pay Token”)]]


[[Money: Clause(“Airdrop Token”)]]


We have created the following escrow programs for business deals that call for locking funds for a duration or other contingencies, starting with ether (Ξ) and a generalizable template for any digital token (ERC-20):

[[Escrow: Clause(“Escrow Ether”)]]

[[Escrow: Clause(“Escrow Token”)]]


We have consolidated and produced feature-complete templates for issuing digital tokens for utility and/or securities using the well-documented OpenZeppelin, TokenSoft, and atpar open-source token implementations:

[[Token: Clause(“Issue Token”)]]

[[Token: Clause(“Issue Security Token”)]]

These are core legal engineering building blocks that can launch any agreement and business process into Web 3.0. No time like the present to optimize. Get started today on our public law library and execute advanced blockchain programs with legal templates in seconds:

About OpenLaw

OpenLaw is arranging the world’s commercial transactions. Using OpenLaw, anyone can more efficiently engage in commercial transactions, all while leveraging next-generation blockchain-based smart contracts. To learn more about OpenLaw, check out our site and documentation for an overview and detailed reference guides. You can also find us at or tune in in our community Slack channel. Follow our Medium and Twitter for further announcements, tutorials, and helpful tips over the upcoming weeks and months.


Written by


A commercial operating system for blockchains. By @awrigh01 and @bmalaus; a @ConsenSys spoke.

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