Definition:
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A Ricardian Contract is a legal contract that was introduced first in 1995 by a well-known programmer, Ian Grigg. The concept is now part of the blockchain as well. Here is the basic definition:
“It is a form of digital documents that act as an agreement between two parties on the terms and condition for an interaction between the agreed parties.”
What makes it unique is – it is cryptographically signed and verified. Even when it is a digital document, it is available in a human-readable text that is also easy to understand for people (not only lawyers). It is a unique legal agreement or document that is readable for computer programs as well as humans at the same time.
Simply put, it has two parts or serves two purposes. First, it is an easy-to-read legal contract between the two or more parties. Your lawyer can easily understand it, and even you can read it and understand the core terms of the contract.
Second, it is a machine-readable contract as well. With blockchain platforms, these contracts can now easily hashed, signed, and can be saved on the blockchain.
All in all, Ricardian Contracts merge legal contracts with technology, blockchain technology to be precise. They bind the parties into a legal agreement before the execution of the actions on the blockchain network. (Ref: https://101blockchains.com/ricardian-contracts/#prettyPhoto)
Frameworks for LSM:
Ergo
Add executable logic to your contracts using a programming language specifically engineered for legal agreements
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