Comment by pjhumble | Hacker News Reader

Comment by pjhumble | Hacker News Reader

Many legitimate companies take advantage of poorly written contracts for monetary gain. The terms state the DAO's code is the contract. It's just as if he was a lawyer or analyst, who did his due diligence, carefully reading the contract and finding a (legal) loophole. English may be imprecise, and a paper contract could be challenged in a courtroom, but with smart contracts, there is no need for a court, since the contracts are governed by the laws of physics (the VM).

When the stakes are real and consequences real, more money and smart people will be attracted to the platform, and over time smart contracts will become more robust. Without real consequences, what is the incentive to participate if the rules can change when they don’t always go in your favor?

Yes, wording can be twisted. But the other side can mount the legal argument that this was not the meaning of the original contract. From http://apps.americanbar.org/litigation/committees/trialevide...

  Strict construction might be the appropriate 
  approach if we lived in a society where language 
  was so formal, standardized, and known that every 
  contracting party would use precisely the same 
  words to describe an agreement.

That's more tricky, ethereum claims anything permitted by the code is the contract.

e.g. Spyglass vs Microsoft

https://en.wikipedia.org/wiki/Spyglass,_Inc.

The deal stipulated that Spyglass would receive a base quarterly fee for the Mosaic license plus a royalty from Microsoft's Internet Explorer revenue.[6]

If IE revenue is $0, then royalties are $0, too.

Not nice, but perfectly legal.

> Without real consequences, what is the incentive to participate if the rules can change when they don’t always go in your favor?

That's the root problem here. The law works because people believe that it works. Once people lose that belief, the typical response is violent suppression, or violent revolution.

> Without real consequences, what is the incentive to participate if the rules can change when they don’t always go in your favor?

Yes. This should be the very core of the argument, with a focus on the words "conseqeunces" and "incentive".

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