Clause, the blockchain legal contract company, has launched their public beta. The company takes static legal contracts and converts them into dynamic automated agreements. For example, automatic payment based on the performance of a contract.
The startup also founded Accord, the trade standards industry body that boasts many leading global law firms as well as Hyperledger, R3, and IEEE as members. Accord is creating a template library of smart clauses. Every template consists of some natural language, data elements, and some logic.
For example, if I acknowledge delivery of 50 cartons, I pay you $1,000 fourteen days later. Once the delivery is acknowledged, the payment happens automatically, without further intervention from either party.
Often most companies have reasonably standard contracts for specific functions such as sales or procurement, and they tweak the terms for particular clients or suppliers.
Talking to major enterprises, using blockchain for procurement contracts is a topic that has been mentioned several times.
How it works
An existing contract in Word or pdf can be imported into the Clause platform. Certain clauses can be converted into ‘smart clauses’ with added functionality. They give an example where a buyer and supplier need to provide signatures plus the buyer needs to provide payment information. Once those details are entered, it automatically triggers a payment using Stripe.
The trigger doesn’t have to involve immediate payment. A smart clause could stipulate payment at a later date or based on some other action.
Smart clauses are dragged from a template library and configured. The template library is based on the Accord legal consortium standard clauses.
Clause works with blockchains but is trying to be blockchain agnostic. They’re an IBM Blockchain business partner. The company received a grant from the Tezos Foundation and so plans to integrate with Tezos. Plus they’ve been working closely with R3’s Corda.
There’s plenty of activity in the sector. The Agreements Network (AN), founded by Monax, is planning a blockchain network. Clause will be a “default contract lifecycle management provider” on AN. And in the US, Open Law is a competitor network to AN.