Definition:
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
Ergo enables business logic expressed over the variables from your contract and responds to real-world requests occurring throughout the contract’s lifetime .
https://www.accordproject.org/projects/ergo/
Cicero
Create reusable machine readable natural-language contracts and clauses using the Cicero templating system.
Cicero provides a universal format to structure clauses, sections, or whole contracts as machine readable objects that are capable of being searched, analyzed, and executed.
https://www.accordproject.org/projects/cicero/
Clause
Contracts sit at the heart of all organizations. When managed correctly they can be your business’s biggest asset, but that management is often time-consuming and resource-intensive. Clause takes that pain away by changing contracts from static documents to a dynamic, integrated, part of your business. Using Clause, you can connect contracts to your existing tools so that you can automate business processes and contract management — all from one powerful platform.