Characterization and Breach Relief Path of Smart Contracts in the Civil Code

Abstract

Smart contracts pose a structural challenge to traditional civil law categories because they combine automated execution with contractual intent. This study examines how smart contracts can be characterized within the Civil Code framework and how breach relief paths can be constructed when automated performance fails or deviates from agreed obligations. The research adopts a doctrinal and comparative methodology. It first reconstructs the main theoretical models of smart contract characterization, including unilateral code-based models, hybrid contractual models, and relational contract models. It then tests these models against core Civil Code institutions: formation and validity, performance, non-performance, and remedies. The analysis focuses on the tension between immutability and legal flexibility. Because smart contracts execute automatically, breach may not appear as a simple refusal to perform. Instead, breach can arise from coding errors, oracle failure, unintended asset transfer, or changes in legal circumstances. The study develops a relief path framework that maps different breach scenarios to the available relief paths, including automatic reversal, specific performance, damages, and rescission. It also considers the role of judicial intervention and party agreement in modifying automated outcomes. The findings suggest that no single characterization is sufficient. A layered approach is more coherent: smart contracts can be treated as contracts for formation and validity, as automated performance mechanisms for execution, and as objects of judicial adjustment when relief is sought. The study proposes that Civil Code doctrine should adopt a functional and context-sensitive method. This method respects automation while preserving core protections such as good faith, fairness, and remedy hierarchy. The conclusion offers normative guidelines for legislators, courts, and drafters. These guidelines aim to integrate smart contracts into the Civil Code without abandoning its systemic logic. The research contributes a characterization framework and a breach relief path model for legal doctrine and practice.