A Legal Framework for Digital Systems

The Zenotta Digital System brings the digital and the legal worlds together by accepting that the digital system must comply with legal requirements of the applicable national and international law. Thus, all legal acts executed on the digital level are legally valid, compliant to national law and, therefore, executable. It is an interesting observation that many other digital systems are conclusively judged by national jurisdictions in conflicts with mandatory law or between participants in these systems. By accepting the primacy of national law, the Zenotta Digital System shall be judged in its own legal system because it can itself enforce applicable law and administrative orders.

We use the term 'law' for any statute of a legislator from any jurisdiction, in whatever form the legislator has expressed its intent, and the term 'private legal act' in the sense of any expression of a legally valid will by a natural or legal person; if two (or more) persons express a mutual will, they are bound by contract, if a person expresses their will in the legally binding form of a vote, this leads to a legally valid resolution by vote if the correspondingly specified requirements of a successful vote are met (e.g. statutes of a company), or a person can draw an option through a private legal act.

Each legally valid right or obligation is embedded in one or more jurisdictions and can be expressed by text, code, and other means of expression such as signs, gestures, plans, documents, or circumstances. Law and private legal acts are binding for both natural and legal persons, which requires a clear assignment to the corresponding (real and digital) identity and an analysis of its legal capacity. A digital legally relevant system must therefore be designed for seamless interaction between both text and code and further be able to integrate these other expressions of intent of legislators and will of persons, so as to maximise the respective advantages of law and private legal acts written in text and in machine-executable code. This allows a future-proof, staggered approach towards a digitalised law without an additional risk to the subjects of the law.

The human understanding of expressed legislator's intention or person's will is the ultimate guideline in the interpretation of law and private legal acts, which finally enables the largely automated digitalised application of laws and private legal acts. After clarification of the actual intent of legislators or will of persons using the available facts and all methods of interpretation, the execution of the rights and obligations derived therefrom can be achieved in finite time and finite numbers of instructions. Thus, the Zenotta Digital system makes a clear cut between (i) the programming of private legal acts or Smart Contracts in a Turing-complete programming language on a separate system layer, and (ii) the execution layer on the blockchain, where the pure execution commands are programmed in a stack language, so enabling the update during the run-time of private legal acts.

The Zenotta Digital System implements (i) an efficient dispute resolution process with an inherent human-based arbitral proceeding and a legally valid interface to state jurisdiction, and (ii) an efficient internal enforcement process to comply with administrative orders of state authorities, both to be executed on the execution layer of the blockchain.

This integration into the established global legal framework ensures that the digitalised transaction is more than a risk-allocation among creditors and debtors which determines the role of Claimant and Defendant in a court or arbitral proceeding outside this digital system.

Therefore, the fully-adapted legal environment for data connects with all three layers and ensures that any and all Smart Data transactions across the network conform with privacy requirements while being fully compliant with any applicable national and international laws.