Clear DefinitionsRicardian Contract
1 min read
Pronunciation
[ri-kar-dee-an kon-trakt]
Analogy
A Ricardian Contract is like embedding a hyperlink in legal text that points directly to the running code implementing those terms.
Definition
A human‑readable contract document that binds legally enforceable terms to machine‑readable code, linking legal prose with smart contract logic.
Key Points Intro
Ricardian Contracts unify legal and technical facets by:
Key Points
Dual representation: Human‑readable text and machine‑readable hash.
Cryptographic linkage: Digital signature binds text to code.
Legal enforceability: Provides legal context for on‑chain actions.
Versioning: Tracks amendments via hash changes.
Example
A token sale includes a Ricardian Contract PDF with terms hashed and stored on‑chain; the smart contract verifies the hash before accepting contributions.
Technical Deep Dive
Creator writes legal prose with placeholders for variables. A parser generates a canonical form and computes a SHA‑256 hash. The hash is embedded in the smart contract. During execution, on‑chain code verifies the stored hash matches the document, ensuring the code reflects the agreed terms.
Security Warning
Discrepancies between prose and code can lead to legal disputes; ensure alignment via rigorous review.
Caveat
Legal recognition varies by jurisdiction; may not be enforceable everywhere.
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