Herbert Smith Freehills, Data61 and IBM are creating a way to use IoT data to check if legal contracts are properly executed.
The three will combine efforts to build what they are calling the Australian National Blockchain (ANB), which will keep track of “smart legal contracts” and whether or not the contract conditions are met.
“Once completed, the ANB will enable organisations to digitally manage the lifecycle of a contract, not just from negotiation to signing, but also continuing over the term of the agreement, with transparency and permissioned-based access among parties in the network,” the three partners said in a statement.
It is anticipated that contracts on the blockchain will “contain smart clauses with the ability to record external data sources such as IoT device data, enabling these clauses to self-execute if specified contract conditions are met.”
“For example, construction site sensors could record the time and date of a delivery of a load on the blockchain and trigger a smart contract between the construction company and the bank that would automatically notify the bank that terms have been met to provide payment on that load delivery,” they said.
The consortium said it is “already working with another Australian law firm to bring the ANB to market.”
It also intends to invite regulators, banks, law firms and other Australian businesses “to participate in the pilot which is expected to start before the end of the year.”