The law.MIT.edu crew spent most of the week happily hacking with Nina Kilbride of Eris Industries one the first of a new breed known as "Legal Engineers"! Dazza Greenwood and Nina worked on a core legal element, the secured transaction. In a secured transaction, collateral is pledged as security for a debt. David Blaszkowsky joined the team most of the first day, contributing a solid grounding in the broader FinTech standards and regulatory context.
The documentary elements of a secured transaction are typically general contract terms and conditions, a promissory note and a collateral security agreement, These three elements serve different functions and are often, but not always, separate documents within a loan transaction. By iterating a methodical, modular implementation of secured loans, we can use blockchain technology to both replicate and advance legally significant commercial relationships.
We explored blockchain enabled secured transactions using a U.S consumer auto loan as the reference use case. We're iterating a novel approach to legal hacking which not only includes some working code (smart contracts in this case) but also corresponding legal instruments and providing context through a bar exam style fact pattern. Stay tuned for some juicy "smart contract" goodness!