Smart wedding contracts could allow us to handle divorce procedures in a faster, cheaper and more transparent way. A recent example in Austria provides an interesting use case.
53% – that’s the divorce rate in the US.
Some European countries have divorce rates higher than 60%.
Belgium is leading the pack – 70%. Maybe that’s because if you are Belgian, you are getting so much physical pleasure from eating chocolate, you don’t need a spouse anymore.
Who can blame them, Belgian chocolate is soooo good.
Joking aside: Considering high divorce rates across the western world, thinking about an “exit-strategy” in form of a marriage contract might be good advice.
It’s surely not the most romantic conversation, but hey, better safe than sorry?
Blockchain-based wedding contracts
The first blockchain marriage took place four years ago, when blockchain consultant David Mondrus married his spouse, using a smart wedding contract. “Life is not eternal, and death can separate us, but the Blockchain is forever,” they said on their wedding.
Last November, Lukas Götz, CEO of the blockchain startup block42, got married in Austria.
On the contrary to paper-based contracts, it’s not a contract that remains the same over the entire life span of the marriage. The smart wedding contract is flexible and can be actively managed.
Every new asset purchased by the couple will be tokenized and added to the wallet. If the couple buys a new car, it will be added to the smart contract and its ownership rights will be documented on the blockchain.
Moreover, the Ethereum wallet can be used as a savings account. It can receive ETH and common household expenses can be paid via the wallet’s pay function.
In case of divorce…
The smart wedding contract has a divorce function which can only be invoked by spouses. Hence, Lukas’ mother-in-law has no say in the matter.
Once both parties agree to divorce, the remaining funds in the wallet are split in half and send to each party’s individual wallet. All included assets will be divided automatically based on pre-defined rules.
Considering how emotionally painful and long-lasting divorce negotiations can be, this is a much faster way to end a marriage. It also saves significant legal costs.
A legally binding contract
Another detail worth noticing is that in case of Lukas Götz and his spouse, the smart wedding contract is a legally binding contract. The couple worked together with the law firm Stadler Völkel, to ensure the contract’s legal status under Austrian law.
“We didn’t attempt to make this a PR stunt, like other smart wedding contracts before ours,” says Lukas Götz. “We wanted to sign a legally binding contract, based on blockchain technology. That’s why we hired a law firm.”
For the most part, smart contracts are not legal contracts, which means courts would not accept them. They may turn into legally binding agreements once certain conditions are met, but they are not legal documents per se. It’s different in this case.
“This pilot shows what’s possible in the field of smart contracts – today and in the near future. There are many different questions concerning blockchain-based contracts. Smart contracts have the power to replace written contracts,” says Urim Bajrami from Stadler Völkel.
The fusion of smart contracts and legal contracts is something we will probably see happening more often in future. Thus, this smart wedding contract provides an interesting use case.
Just one question: What about “martial duties”? Could they be included in a smart wedding contract as well?