Live Contracts — What’s all the fuss about?

LTO Network plans to change the way law is practiced. And yes, it is using the blockchain

Picture this. A contract or law visualized in such a way that it is understandable for both humans and computers. Not only the rules that you are agreeing upon in the contract, but also the consequences behind those rules. With our solution Live Contracts, we enable equality of rights for all parties involved.

So, what’s the big deal? For those of you that haven’t been in a legal conflict before, let me explain to you how this works. For starters, law isn’t fair. On paper it is, because the rules apply to everyone. However, in practice the law is on the side of those with the deepest pockets and with friends in the highest places.

Millions of deals are closed every day. Most of them are formalized in contracts. You won’t notice it, but when you don’t get paid or are not happy with how things are going you take a look at the contract. Even for a pretty simple deal, you would have a 3 pager contract with ‘legal lingo’ that is not really easy to read and you would definitely need a lawyer to explain you what the consequences are of breaching a certain clause. Lawyers are doing this for a reason. A natural language contract is prone to ambiguity. This is not per se a bad thing, but lawyers that are drafting the contracts use this ambiguity to their benefit. Ambiguity allows lawyers to build in escape routes within the clauses of the contract. Because when the shit hits the fan, they want parachutes to escape from the breached clause or even the entire contract.

Just a quick example of a contract exploit that cost a Canadian company a million bucks.

In this case a comma was misplaced, corrupting an entire sentence and the meaning behind it. The regulator judged that the Canadian Telco could escape a 5 year contract after as little as one year, although it was clear to everyone that parties only allowed for that possibility after 5 years. With Live Contracts we are getting rid of linguistic chicaneries such as these.

Isn’t this already solved with Smart Contracts?

Smart contracts are written in a programming language, which are instructions for computers. This means that a Smart Contract is even less readable for humans than a paper contract and just as vulnerable for intentional or unintentional exploits.

Additionally, Smart Contracts are intended to be self-executing and self-enforcing agreements. They do not operate within a legal framework and are not enforceable by a judicial system. This severely limits the types of contracts you can create as Smart Contract.

Live Contracts are easy to understand for humans as well as computers. They can be used for any type of agreement, from a simple contract to complete laws.

This might be interesting for big corporations, but why should I care?

We want everyone to be able to participate in our economic system without being dependent on others. This is especially important for individuals because they currently only have the choice between relying on a lawyer or blindly trusting organizations and governments.

To make Live Contracts easily understandable for both computers and humans, we split up a contract or law in small and understandable rules. Parts that are considered simple and safe, can be executed by computers. Other parts can, and should, be left to human interpretation.

A paper contract gets signed and put into a drawer only to be forgotten. A Live Contract is something that you continue to interact with. Each event related to the contract is logged in an immutable way, using decentralized storage and the blockchain.

Consider a single large database, managed by the government, to which all other systems are connected. This database would be the single source of truth. Such system would be highly efficient, however, it would unfortunately also be very easy to manipulate. Especially by the people in power.

To prevent this we invented bureaucracy. Most people think this is a bad thing, but in fact bureaucracy is our best defence against fraud and favoritism. Having a large number of people jumping to hoops and making sure everything is documented, provides a long paper trail and proof of work. This makes it difficult to exploit the system.

By using the blockchain, we provide an alternative for bureaucracy. One that works even better for mitigating fraud.

Our solution makes it possible for anyone to participate, without having to rely on others. This is especially important for individuals, as currently they only have the choice between depending on a lawyer or blindly trusting organizations and the government.


Live Contracts can replace any contract or law making them easier to understand. This makes them accessible for everyone involved. Unlike smart contracts, they allow automation without giving full control to machines. By storing events and information in an immutable way we mitigate fraud while reducing bureaucracy.

Live Contracts will make the legal system fair for everybody.

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