For common situations like rent, open-source contracts are inevitable. This will give people who could never afford lawyers (think 3rd world) access to much of the results middle class Americans take for granted.
When I was renting my apartment in Sweden, the contract was literally one page long. It was written in such a simple language that I could understand it even with a rudimentary knowledge of Swedish.
When I was buying my apartment, the contract was four pages long, and the language wasn't much harder.
Now, with an Ethereum contract I would have to learn an esoteric programming language, look at the contract's source code, verify that it actually corresponds to an actual contract that we already agreed to.
And all that even without getting into the question of who's going to enforce this contract, and how.
And don't forget, in many jurisdictions an "IOU $50" written on a napkin is a legally binding contract requiring zero lawyers.
Even in 3rd world countries you will need someone to understand programming and contracts to verify that the smart contract actually implements what you've agreed on.
So you're replacing "government agents installed through corruption" with "saints beyond reproach because smart contracts"?
And somehow this won't also end up artificially boosting the "reputation" of potential arbitrators?
(Or perhaps the government will make it clear that anyone who acts as an arbitrator without government authorization will spend a long time in a small cell.)