Available at http://ojs.instituteforcompgov.org/index.php/jsj
Journal of Special Jurisdictions 1(1) (2020)
Ulex: Open Source Law for Non-Territorial Governance
Tom W. Bel1
Professor, Chapman University, Fowler School of law, [email protected]
Abstract Communities that stretch across international borders struggle to resolve their members’ disputes. It is not a trifling problem. Distributed protocols such as Ethereum, EOS, and Dash host hundreds of billions of dollars in assets and handle transactions worth millions daily. Their members likely number in the tens of millions, scattered in unknown locations across the globe. Even the most successful of these communities have fractured over questions of how to interpret, apply, and amend their rules. The resulting “governance by hardfork” has generated skepticism about all things crypto –from currencies, to economics, to governments. Distributed protocols need a comprehensive, trustworthy, independent set of rules for resolving disputes. Ulex, an open source legal system, offers a solution. Its substantive and procedural rules can resolve the disputes of communities stretching across international borders. Its flag-free rules, drawn from tested and trusted private and non-governmental sources, define a wide range of legal claims and the procedures to follow in resolving them. This paper explains how Ulex can upgrade the governance of distributed protocol communities, describes current efforts on that front, and paints an attractive future of open source, non-territorial law.
Keywords: non-territorial governance, Ulex, open source, blockchain, distributed protocol, private law. Resumen Las comunidades que se extienden a través de las fronteras internacionales luchan por resolver disputas entre sus miembros. Esto no es un problema insignificante. Los protocolos distribuidos
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como Ethereum, EOS y Dash alojan cientos de miles de millones de dólares en activos y manejan transacciones por valor de millones diarios. Sus miembros probablemente ascienden a decenas de millones, dispersos en lugares desconocidos en todo el mundo. Incluso las más exitosas de estas comunidades se han fracturado por preguntas sobre cómo interpretar, aplicar y modificar sus reglas. La resultante “gobernanza de hardfork” ha generado escepticismo sobre todas las cosas criptográficas, desde las monedas, hasta la economía y los gobiernos. Los protocolos distribuidos necesitan un conjunto de reglas integrales, confiables e independientes para resolver disputas. Ulex, un sistema legal de código abierto, ofrece una solución. Sus reglas sustantivas y de procedimiento pueden resolver las disputas de comunidades que se extienden a través de las fronteras internacionales. Sus reglas sin bandera, extraídas de fuentes privadas y no gubernamentales probadas y confiables, definen una amplia gama de reclamos legales y procedimientos a seguir para resolverlos. Este artículo explica cómo Ulex puede mejorar la gobernanza de las comunidades de protocolo distribuido, describe los esfuerzos actuales en este campo y pinta un futuro atractivo de código abierto y leyes no territoriales.
Palabras clave: gobernanza no territorial, Ulex, sistema legal de código abierto, blockchain, protocolo distribuido, ley privada.
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system gave nation states unchallenged 1. INTRODUCTION: DISTRIBUTED authority within solid, controlled borders. It GOVERNANCE NEEDS offered a comfortingly simple view of the NON-TERRITORIAL LAW world to those who, like Fukuyama (1992), would have history stop. Unconcerned with As human society has evolved from clans to what sages of statecraft proclaim, however, kingdoms to nation states, its communities non-territorial communities have started have grown larger and less tangible. Our first drawing outside the lines of traditional and most concrete bonds remain those political institutions. forged by birth. Wider family relations The Internet opened cross-border include distant kin. Kingdoms connect communications to the masses, allowing strangers through laws abstract enough to fit casual personal conversations to stretch into code, but real enough to kill. Maine’s across the globe. Non-territorial talk has (1861) influential account of how contract flourished. Mere talk has little need for law, relations tend to supplant status ones in though. Only after Bitcoin raised the stakes developing societies represents a signal by turning talk, in the form of binary example of the more general phenomenon: computer code, into money did distributed Human society tends toward protocol communities find themselves dematerialization, in that it moves from the sorely needing effective ways to resolve immediate and physical to the remote and inter-member disputes. Though intangible. commentators have recognized the problem, The dematerializing of society has solutions remain elusive (Yocom-Piatt, not stopped with nation states. Granted, it 2015). seemed for a long while as if the Bitcoin itself provides too little international system set up in the Treaty of infrastructure to support dispute resolution Westphalia would keep the world’s largest services. However, it inspired more communities more or less within their sophisticated protocols, such as EOS, defined boundaries, functionally and Decred, and Dash, designed to support physically. People talked, traded, and voting, delegation, funds disbursement, and traveled internationally of course, but most other administrative functions (Smith + people lived in one place, under one law, Crown Intelligence, 2019); But only very most of the time. In its ideal form, this
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recently, and still very imperfectly, have technical standards, most protocols do not these non-territorial communities begun to even try to document the rules for how address the challenge of resolving disputes members should treat each other to avoid between their users, who log on from points conflict and, when conflict inevitably erupts, scattered across the globe, identified only by how to resolve it. alphanumeric pseudonyms. Consider Bitcoin. It has suffered a The largest of these non-territorial number of existential conflicts in its communities handles transactions worth relatively short history. In no case were tens of billions of dollars daily and holds these resolved by public deliberation in the assets worth hundreds of billions community’s governing institutions. Bitcoin (CoinMarketCap, 2019). Though an exact has no such institutions. Nor did the census remains impossible, it likely runs to contesting parties seek guidance from millions. Despite having so much at stake, objective and qualified third party though, these new networks have stumbled arbitrators. The Bitcoin protocol does not at governance. Even the most successful itself include rules for resolving user has suffered hacking attacks, emergency disputes, and those fighting over Bitcoin’s hard forks, and the influence of personal fate never expected that any territorial politics (Buterin, 2017 & 2018). This sovereign’s courts would settle their disappointing performance has discouraged conflicts. How could a territorial court investment and engendered broad understand their world? And how could it skepticism about all things crypto-, enforce its ham-fisted decisions? Happily, especially crypto-governance (Daian, P., for Bitcoiners, it could not. Kell, T., Miers, I., & Juels, A., 2018). Instead, Bitcoin has relied on Though less noted than high profile extra-protocol manipulation by influential failures like stolen funds or insider stakeholders to quell community unrest influence, distributed protocols (Buterin, 2013) or, when that has failed to communities suffer a more fundamental and forge the peace, splitting the community into widespread problem: they have no reliable separate and incompatible parts via a way to resolve disputes between members. hardfork (Bitcoin Exchange Guide, 2017). Wanting that social good leads to all manner Not all protocols ignore the need to of social ills. Beyond specifying the purely provide a way to resolve their members’
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disputes, but none appear to have satisfied Forum and Constitution for the EOS User it. The creators of the EOS network in Agreement (EOS New York, 2019). Curiously particular made a great show of creating a for a supposed agreement, however, the Community Arbitration Forum bound to document claims that the network’s resolve member conflicts according to the “functions, enforced by code, do not require rules set forth in the EOS Constitution. The the consent of Users” (Art. III). It offers result? Utter failure. Despite its attempt to nothing by way of substantive rules or a bind users to substantive rules and a forum means for resolving members’ disputes. for resolving disputes, the EOS Constitution The Decred network likewise offers had no such effect because it was never a self-proclaimed “Constitution” (Decred, presented to prospective users in the form of 2019) that fails to deliver. Though it defines a mandatory “click-through” agreement. a few technical details, the document punts Without a binding contract with and to the “Decred network’s consensus” for between users, EOS has no just or practical rules to govern users. It says nothing about way to give its supposed laws effect. With it, dispute resolution. Despite its grand name, EOS’s rules would be enforceable like any therefore, Decred’s “Constitution” does not other agreement to resolve disputes under provide its members with the rules private arbitration. necessary to avoid and defuse conflict. Perhaps that was all for the better, Why have distributed protocols given that the EOS Constitution’s threadbare fallen so short of providing the rule of law? invocation of “this Constitution and the Despite the fact that they both work with Maxims of Equity” (EOSIO Core Arbitration code, the categories of programmer and Forum, 2018, Art. X) offers nothing close to lawyer seldom overlap. The programmers the level of detail required to handle responsible for creating distributed transactions worth billions of dollars and protocols evidently know quite a bit about involving millions of users. Procedurally, how to write rules for data but very little the EOSIO Core Arbitration Forum never about how to write rules for humans. operated as planned, instead relying on Lawyers could doubtless do better at the unprofessional and ad hoc action (Floyd, latter coding job, but few lawyers know 2018). The EOS community subsequently much about distributed protocols. abandoned the EOSIO Core Arbitration
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Still less will most lawyers, of the letter U with the Latin word for law, accustomed by training and vocation to lex. The U stands not for universal or think of law as the sovereign command, uniform, but instead from a somewhat silly perceive that distributed protocol pun: “You put the u in Ulex.” With regard to communities need an entirely different its name no less its underlying philosophy, approach. Non-territorial, open-source, therefore, Ulex follows the lead of Unix, opt-in governments need legal systems with GNU, and Linux, the names of which also the same features. originated in wordplay, as Tozzi (n.d.) Legal systems designed by state recalls. officials to provide top-down control within Ulex relies entirely on volunteers for bounded territories do not offer a very good its growth and support. It owns nothing; fit for communities distributed across sells nothing. No for-profit or government national boundaries, governed by the firm funds or directs Ulex. Its friends undirected choice of independent nodes in evidently act from other motives. Perhaps an ever-changing network. Non-territorial they thrill in helping to launch an idea that governance needs non-territorial law. This might change the world, and for the better. paper explains why and how Ulex, the open Like a flock of birds or a pod of source legal system, can fill that need. It dolphins, Ulex volunteers gather in different begins with a summary description, with places and in different forms at different special emphasis on the features that suit it times. It began as an idea by the author of for non-territorial communities. The section this paper, then took form in written words then describes ongoing volunteer efforts to (Bell, 2018, p. 185). Thus set free, Ulex put Ulex into public use. quickly found friends. The Startup Societies Foundation won a 5,000 Euro grant from the 2. CURRENT EFFORTS TO European Resource Bank to promote Ulex’s IMPLEMENT ULEX: THE OPEN development, which it leveraged into more SOURCE LEGAL SYSTEM funds via an Indiegogo fundraiser (DeMorro n.d.). Those funds went to public education As befits a legal system modeled on open about Ulex through the Institute for source software, complete with call-outs to Competitive Governance, a Foundation legacy code, Ulex has a startup-style name. The word Ulex comes from the combination
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research project, including support of the communities; the model clauses will ensure 1 present publication. (Id.) that Ulex installs and runs smoothly. Ulex, as the legal equivalent of an open source software project, has settled in 3. ULEX PLUGIN at the Ulex Open Source Repository on The Ulex repository offers a variety of public Github, the most popular venue for open resources. It provides version 1.1 complete source coding projects (ulex-opensource, with links and a lovely picture of Ulex’s 2019). There, a small volunteer corps keeps flowering mascot, Ulex europaeus, the legal code updated and looks for new commonly known as gorse. installs. Since they stand to get little more (ulex-opensource, 2017). It offers a forum to than glory for their efforts, it seems only fair air questions about amending Ulex, such as to give them public credit. The members of to create a new version 1.1.a. the Github Ulex Open Source Repository (ulex-opensource, 2019, Ulex issue #5). And include: Bradley Hook, Christian Saucier, most notably for present purposes, it offers joestartupsocieties (Joseph McKinney), the Lexinomicon game. David McFadzean, the author, and Wil The Lexinomicon game is not about Bown. (ulex-opensource, 2019, People). moving pieces around a board or shooting May their efforts benefit many and inspire computer-generated zombies. It instead more than a few. provides a simple, robust structure for The following subsection begins with incentivizing distributed members of a a description of some recent actions of the community to contribute to a defined Ulex volunteer corps. The overall impetus: project, one usually chosen, as here, to make it easy for parties engaged in online contribute to the community’s common contracting to choose Ulex for their good. Specifically, the Lexinomicon game agreements. After that account from the will allow the volunteer corps to bring other front in the market penetration campaign, paid minds to bear on the question of how to the subsection will offer some working legal encourage Ulex’s growth, by posing code: model clauses to put into contracts to challenges and offering monetary rewards make sure that Ulex works as intended. The for those who satisfy them. plugin will deliver Ulex to non-territorial So far, the game remains a mere scrimmage. If all goes as planned, it should 1 The author was not offered, did not receive, and would not accept those funds, to which he instead contributed.
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see its first use to develop the Ulex plugin. bevy of Ulex judges-for-hire. Publishers will First, though, the volunteers must define the collect opinions. Commentators will pick specifications that free-lancers must satisfy them apart. Like ocean life congregating to win Lexinomicon’s rewards. The around a tapped-out oil rig, this ecosystem development team has nearly finished that of services will make Ulex more convenient task, making it as far as a draft a wireframe and resilient. interface (ulex-opensource, 2019, To nourish that kind of growth, the Lexinomicon issue #28). Once having Ulex plugin will support identities, thereby defined the requirements for credentials, and trust ratings. These features winning, the team can sit back and see what will help users evaluate counterparties using Lexinomicon’s bait attracts. Ideally, it will the network. Low-trust communities seldom result in plugins by which users of popular thrive; trust-rich ones enjoy lower distributed protocols and services can apply transaction costs. With these add-ons, Ulex the legal system to their transactions, both could help ensure the survival and growth of when they make agreements and when they its fledgling effort. break them. Provided that network effects kick in The Ulex plugin could not simply and Ulex begins to see wide use, users can make it easy for parties to invoke Ulex, enjoy safe, convenient, and cheap using choice of law and forum clauses like transactions among themselves, encouraging those described below. It could potentially the growth of peaceful and prosperous 3also give them access to a network of legal communities. It all has to start with just one services. No less than in territorial or a few specific applications, though. The communities, the structure provided by law following paragraphs focus on a few of the of non-territorial communities should most likely candidates. eventually come to support a rich web of EOS, Decred, and other distributed interconnected services. Lawyers protocol communities. These could in theory specializing in Ulex will upload their adopt Ulex wholesale or piecemeal, at a practices, drafting contracts, creating level each individual user accepts when corporations, and litigating in the new legal transacting through the protocol or in finer system. Disputes will give rise to grained agreements, built at the entrance to adjudication services, which will support a proprietary side-channels. Whether practice
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can do likewise remains as yet untested. As disputes nor sets forth guidelines for related above, no distributed protocol of specialized courts to follow when it comes note has yet succeeded in both conditioning to deciding whether to respect the parties’ access to agreement to specific terms of use choice of law, if they make one, and if not, and creating non-territorial mechanisms for what law to apply to their dispute. The adjudicating community disputes. EOS tried closest it comes to addressing the crucial hardest and came closest - an encouraging topic appears in its projected plan to let result. Perhaps having an Ulex plugin jurors of each specialized court set available could encourage another, more “guidelines about how to arbitrate disputes” successful effort. that function like “the laws in traditional Kleros. Kleros offers an open source justice systems” to “determine which party online dispute resolution protocol that uses should win a dispute.” (Lesaege, Ast, & the blockchain and crowdsourcing to George, 2019, p. 10). While that leaves open adjudicate disputes (Kleros.io, 2019). the possibility that informed jurors will in Contesting parties choose the number of each case choose a body of law adequate to jurors and the specialized court from which solve a wide range of disputes efficiently, jurors will be drawn to decide their dispute. without showing a bias to any particular Kleros directs the parties’ query to a panel of territory, it does nothing to guarantee or jurors randomly selected from among those even encourage that outcome. Ulex could who have agreed to adjudicate disputes in solve this limitation by ensuring that anticipation of receiving arbitration fees by specialized courts use its rules to decide the parties. Jurors vote on which party when to adopt contesting parties’ chosen should win the dispute. Those who vote with law, if any - a safeguard to prevent them the consensus of all jurors win the amounts from, say, choosing trial by combat. A staked by the losing jurors (Lesaege, Ast, & platform such as Kleros, thus, could George, 2019). Kleros thus far has seen only significatively benefit from choosing a Ulex test use (George, 2018). for all of its cases. Somewhat surprisingly for a OpenBazaar, an open source project, self-proclaimed system of adjudication, has developed a protocol enabling Kleros says next to nothing about the choice e-commerce sales through a decentralized of law. It neither set a default for all online market. It operates on a peer-to-peer
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basis, with no central point of control, and applicable law; each moderator gets to set offers transactions to take place without his or her own terms. Open Bazaar offers the intermediaries, fees, or legal restrictions. policy statements of three moderators as Open Bazaar’s creators may have taken their examples for others to follow (Id. at para. 6). aversion to the law too far, though. Like None of these examples includes a choice of Kleros, it fails to provide adequately for law provision, though moderators more parties to choose the law applicable to their aware of this lacuna could fill it by dealings. specifying the body of law they will apply to The Terms of Service for using the disputes under their consideration. That, market’s software interface specifies only too, would provide an apt place to invoke that “OpenBazaar users must adhere to the the rules of Ulex. Indeed, the Terms of laws in their own legal jurisdiction” Service would do better to specify Ulex or (OpenBazaar2 n.d.). That leaves the law some other suitably open source legal governing sales contract ambiguous when system as the applicable default unless users buyers and sellers are not in the same choose otherwise. jurisdiction. The clause was evidently written not to govern transactions but to 4. MODEL CONTRACT CLAUSES exonerate OpenBazaar and other users from WITHIN ULEX any one users’ violation of local criminal Territorial sovereigns presume that their law laws. The use of OpenBazaar to sell illegal controls everything in their jurisdiction. By drugs, infringing works, and other default, if you live in a country, its laws contraband demonstrates that concern for apply to you. Ulex, in contrast, can apply to criminal liability is not paranoid. But a term a dispute only by the consent of all parties. It admonishing users to obey their local laws rules no territory and does not presume to cannot substitute for a choice of law clause. force itself on anyone. How do parties OpenBazaar deals with conflicts express their consent to Ulex? Through arising between buyers and sellers by contracts. providing an option for them to choose a New users come to Ulex through third party “moderator” to settle disputes contract. The open source plugin described (OpenBazaar, n.d.). At no point does the above will help members of non-territorial interface require any party to choose the communities to easily choose Ulex as the
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law to govern their agreements. Contracting designating the choice of law clause and parties can opt into Ulex by more another designating the choice of forum. conventional means, of course; Ulex has The former designates the law chosen by the already seen use by parties who, while using parties to control any disputes arising under solely electronic rather than paper forms, or related under the contact. A choice of have used relatively conventional choice of forum clause specifies the method or law clauses to make Ulex operative for their institution chosen to decide those disputes. agreement. In any event, those contracts Both clauses appear routinely in contracts of will need to use particular bits of legal code all types and receive respectful treatment to make Ulex operate as planned. even in courts that, by enforcing the clauses, This section offers three model effectively lose control over the dispute. clauses for implementing Ulex. These Happily, Ulex can rely on fairly standard clauses cover choice of law, choice of choice of law and choice of forum clauses. forum, and forfeiture of rights and remedies. Most choice of law clauses say little The first two will sound familiar to any more than that the chosen law will govern attorney, as equivalent clauses appear any disputes arising under the contract. routinely in commercial contracts. The last Lawyers often add a bit of verbiage to clause might sound familiar to estates and ensure the clause reaches as widely as trusts lawyers as something like a will’s no possible. It would not do to have the chosen contest clause. Others might find it law apply only in the event of formal reminiscent of open source licenses, which litigation, after all, when the parties also incentivize those using the materials to keep want it to apply to negotiations, mediations, them in the open source environment rather or other relatively informal dispute than stealing them away to a closed one. resolution processes. The model clause Violate that license and you lose the right to offered below thus includes similarly use the open sourced works. This is broadening terms: similarly the case with the model Ulex clause. Model Ulex Choice of Law Clause: Strictly speaking, Parties who want Ulex governs exclusively any claim to invoke Ulex by contract need only add or question arising under or related two clauses to their agreement: one to this Contract. The Parties
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represent and warrant that their Second (1971), made part of Ulex 1.1 at Rule choice gives them substantial 2.4.1. That rule defers to the parties’ chosen connections to Ulex, that they have a law unless it has “no substantial relationship reasonable basis for choosing that to the parties or the transaction” and unless law, and that no other authority has a “application of the law of the chosen state materially greater interest in the would be contrary to a fundamental policy application of its law to the Contract. of a state which has a materially greater” claim to govern it (ulex-opensource, 2017). In contrast to the first sentence of that The model Ulex choice of forum model clause, the second sentence is not clause does what any such clause should: commonly seen in other contracts. Because designate which institution will have the most choice of law clauses name the law of power to issue binding legal decisions about a sovereign in which at least one party claims or questions arising under the resides or does business, they have no need contract. Contracts that choose the courts of to emphasize the suitability of applying the a territorial sovereign have it relatively easy: law that the parties choose. Unlike a they need only say “U.S. Central District of territorial sovereign, Ulex has the advantage California, Southern Division” or the like. Or that it does not presume to rule anyone. they might cite a prominent private Parties invoking Ulex thus might want to arbitration firm local to one of the parties. play it safe and spell out exactly why others Ulex, having not so much a place as a vector, should respect their choice of law. has to take a bit more care to anchor itself to The second sentence of the model a working institution. clause does this by referencing the parties’ The model clause of course defers in connections to Ulex, reasons for choosing it, the first instance to the parties’ choice of and the absence of any more applicable law. Forum, and invites them to fill in the blank. Why those items? They come from Ulex In actual practice, the clause can most of the itself. Specifically, the clarifying sentence time end there. The parties will agree to invokes the standards for determining when some reasonable Forum, such as a private a court should apply the law contractually arbitration service located half-way between chosen by the parties as set forth in § 187(2) them in a neutral country, or perhaps soon of the Restatement of Conflict of Laws, an online Forum where litigants can choose
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neutral experts to decide their disputes they chose a Forum. This model clause under Ulex law. But for now, the model would then make that choice operative. clause plays it safe by offering a long list of The next fallback? A Forum provided Fora and backup Fora: by the Ulex Foundation. No such Forum yet exists; the putative Foundation exists as Model Ulex Choice of Forum Clause: little more than a Bitcoin address in the Any claim or question arising under author’s care. The model clause prepares the or related to this Contract shall be way for what might be the model forum — a resolved in a Forum hereby self-sustaining open source Forum by and designated by the Parties to the for Ulex users. Until that judicial dream agreement: [insert name of chosen comes to fruition, this sub-clause will affect forum]; else a Forum designated by Parties little more than a speed bump. separate contract of the Parties with The next sub-clause also prepares for each other or a third party; else a a hypothetical Forum — one already Forum provided by the Ulex experienced in Ulex matters. No candidate Foundation; else the most recent institution appears as yet to qualify, though Forum to decide a Ulex claim or presumably one soon will. In the meantime, question, else JAMS in Orange the list of alternative fora concludes with a County, California. real space private arbitration service as good as any and better than most: JAMS. It is not If the Parties do not choose a Forum cheap, and losers pay legal costs in Ulex, so outright, the model choice of forum clause only a very rare and important dispute fills in for them. The list of backup options would make it this far through the model begins by referencing the Parties’ other choice of forum clause, to the bitter end. agreements, whether between them or with The model Ulex forfeiture clause some third party. What kind of third party? engages in the same sort of legal judo Most notably, one like a distributed protocol routinely used by estates lawyers, who use or similar platform that establishes choice of no-contest clauses to protect wills and trusts forum agreements with each of its users. from wasteful litigation brought by greedy For example, a later version of EOS might beneficiaries disgruntled with their windfalls actually bind all users and through which (Legal Information Institute, n.d.). Though
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the wording of the Ulex forfeiture clause agreed choice of forum lose all rights and comes from that context, the inspiration remedies under the Contract. That comes from the use of copyright licensing to discourages defection in the first place. protect open source software from getting Parties who nonetheless defect to other fora swallowed up by those drinking from its run a predominating risk of being denied fount of code. Open source software relief. Even an unapproved forum would defends itself by attaching license-in-kind have to admit, upon reading the forfeiture requirements to derivative versions of works clause, that the complaining Party cannot in its ecosystem. Ulex faces a similar logically prevail by making any claims under problem; the model forfeiture clause offers a the disavowed Contract. They would get similar solution. only a shrug and a bill. Those dismal Ulex cannot survive if Parties cannot prospects will again deter defection. The trust it to generate predictable answers to result: the Contract grows stronger to the important questions such as: What law benefit of both Parties and Ulex users applies to this dispute? Who will decide it? everywhere. If one Party takes those kinds of questions to a forum other than the one agreed to in Model Ulex Forfeiture Clause. Any the Contract, and defined in the choice of party that raises a claim or question forum clause, both the other Party and Ulex arising under or related to this users generally would unjustly suffer harm. Contract in a forum other than one The defecting ex-Party would make complying to its Choice of Forum remaining Ulex users less confident of how clause thereby forfeits all rights and their own disputes might come out. The remedies under this Contract. wrongful act would cast a shadow on the entire Ulex ecosystem, to the loss of all What about Parties who defy the choice of those keeping their promises. law clause by trying to have an unqualified The model forfeiture clause brings forum apply other law to the Contract matters back into balance by making a Party dispute? That, too, arguably inflicts negative tempted to do extra damage face the externalities on third party users of Ulex. prospect of suffering extra costs. The clause Perhaps. But the present model clause works by making those who defy their already does as much as any contract
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properly can; contract law (including the incorporates the most popular and contract law embodied in Ulex Rule 2.3) well-known contract law, as set forth in the does not allow punitive damages. Second Restatement, competent attorneys Furthermore, Ulex’s first iterations would should find it relatively easy to deal with. not want to summarily reject good rules from other legal systems; far from it. 5. ULEX AND THE NEEDS OF Punishing Parties for arguing for the NON-TERRITORIAL COMMUNITIES application of foreign influences would raise Ulex originated to serve special jurisdictions irresolvable boundary questions and subvert rather than non-territorial governments Ulex’s international and open aspirations. 2 (Bell, 2018) . As it turns out, though, both Contracting parties need only kinds of communities need world class rules include the first two model clauses to give from flag-free sources. In the case of special Ulex effect in their relations. The forfeiture jurisdictions in low and middle income clause strengthens that choice by countries, importing laws en toto from a encouraging the Parties to stick to their foreign sovereign risks inflaming locals. It promises, increasing the predictability of would also tie the special jurisdiction’s legal adjudications of the Contract, and by development to that of a distant, different, protecting the Ulex network from loss of and presumably uncaring sovereign. That goodwill. Best practices thus suggest using cannot make for good policy. all three. Why not create a special Those borrowing these clauses might jurisdiction’s laws completely from scratch? benefit from customization in particular Because discerning investors and residents cases. Parties might in particular want to would balk at the prospect. Lawyers, like specify which version of Ulex they choose, wine connoisseurs, tend to disdain given that it has already reached version 1.1 innovation. Innovation means change; and more will doubtless follow. The Model change means risk. Guiding clients through Clauses come with no warranty and nothing red tape labyrinths can generate billable here constitutes legal advice, so it might be hours, granted, but no honest lawyer wants best to consult an attorney when adapting work just for work’s sake. the model clauses in especially complicated or high-stakes cases. Because Ulex 2 Just before this paper went to press, the Próspera ZEDE in Roatan, Honduras launched with a Ulex built into its Common Law Code.
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Has human behavior changed so particular subset of members. Like special much over that the law’s ancient wisdom jurisdictions, non-territorial communities needs updating? Not likely. New laws tend should avoid trying to recreate the law from either to get something fundamental wrong, scratch. They have tried that, already, to or to make wrong something that should disastrous effect. remain legal. Ulex might work well for both So if a special jurisdiction cannot use special jurisdictions and non-territorial foreign law, and does not want to use new communities because its inspiration comes law, what can it do? It could get its law from from a completely non-political source: the private and non-governmental organizations history of computer science. Early such as the Uniform Law Commission, computers ran much as governments do International Institute for the Unification of today: Developers wrote a unique operating Law, and American Law Institute. That is system for each machine. The first what Ulex does, copying select, tested and operating system written to run across trusted rule sets from those and other computing platforms, Unix, appeared in flag-free sources, adding a handful of 1970. Over the following few decades, the bespoke provisions, and combining them in spread of personal computers drove a unifying framework to create a competition between computer operating comprehensive legal system. Ulex thus systems, encouraging the development of provides a third and less controversial proprietary options, like Microsoft Windows option for special jurisdictions than and Apple's OS X, as well as non-proprietary importing rules from a foreign sovereign or options like GNU/Linux. creating an untried legal system out of whole Only recently has governance cloth. advanced to a point that computer science The same features that suit it for reached in the era of shag carpets. A few special jurisdictions also suit it for innovative countries have begun non-territorial communities. These, too, experimenting with installing new legal must avoid tying themselves to any operating systems—specifically, common particular sovereign power. In this case, law rules and procedures—on their though, it is less to avoid inflaming locals territories. We now stand on the cusp of a than it is to abstain from favoring any Cambrian age in governing services. The
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Journal of Special Jurisdictions ULEX: OPEN SOURCE LAW FOR NON-TERRITORIAL GOVERNANCE
advent of special jurisdictions, distributed potential solution. The discussion included a protocols networks, and other startup review of current efforts to make Ulex more communities stands to bring something like available to non-territorial communities in the PC revolution to governance, the form of an open source application encouraging unprecedented levels of plugin and three model clauses to make sure competition and innovation. Just as that, once uploaded to users’ agreements, GNU/Linux freed computer operating Ulex functions as planned. To conclude the systems for public use and adaptation, so paper, this section looks forward. too could systems such as Ulex give the Suppose that the Ulex plugin public open source legal systems. Both program described above comes to fruition special jurisdictions and non-territorial and contracts invoking the legal system communities could benefit. spread throughout distributed protocol Special jurisdictions running Ulex networks. That could drive the growth of an might bring prosperity to regions plagued entire ecosystem of interconnected services: with bad government. Similarly, lawyers drafting contracts and litigating non-territorial communities might find in disputes; judges deciding cases and Ulex a comprehensive and unbiased source publishing opinions; commentators of rules that have been proven by long use to describing systemic trends and local encourage human cooperation and practices; teachers and students creating flourishing. An entirely new kind of social new generations of Ulex users; and coders organization would arise. Competition from building the law into the very structure of these open source communities might even online life. Though not directed by any drive traditional, territorial sovereigns to single mind, the community could grow and borrow some innovations from Ulex. adapt to continue providing the rules humans need to thrive together. 6. CONCLUSION: FUTURE LAW While this sounds pretty appealing, it FOR NON-TERRITORIAL arguably understates the potential benefits COMMUNITIES of Ulex’s use and spread, however. Too few people appreciate the subtle power of the This paper has explored ways in which new rule of law. Like health, it becomes most non-territorial governments need new noticeable in its absence. And yet, like non-territorial law and explored Ulex as a
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Journal of Special Jurisdictions ULEX: OPEN SOURCE LAW FOR NON-TERRITORIAL GOVERNANCE
health, the rule of law holds great value. As ghosts more than they fear the world the World Bank has carefully documented, disappearing in an inferno of heavenly fire. the rule of law represents the single largest Such black swan events seem not to register, source of human wealth (2006, pp. 26, 96). somehow, to most people. Ulex could help non-territorial opt-in The same theory directed in the governments offer users something better positive direction suggests that we run some than the legislative and judicial services of risk of underappreciating the benefits of territorial sovereigns. It can help these new upgrading the rule of law. Most of us have communities enjoy a kind of social vitality known little more than the dinosaur-grade and resilience unknown among the earthly legal systems of terrestrial sovereigns. These nations. operate with brutal efficiency or Taleb (2007) convincingly argues well-intentioned confusion in the best of that humans tend to underestimate how bad cases. Those examples do not equip us to black swan events can get. This paper fully understand non-territorial governments argued up instead of down, claiming that and open source legal systems. Add to the humans also tend to underestimate how cognitive load struggling to appreciate the good gold swan events can get (2018, pp. gentle power of the rule of law. And, lastly, 236-37). The same theory drives both try to fit old cost/benefit models to this new, hypotheses: by evolution and experience, unprecedented, extreme improvement in humans have developed cost/benefit governance. How could we predict the calculations that do pretty well with routine upsides accurately? events but that break down at the tails of the Ulex could also play a role on the event distribution. At those extremes, too black swan side of the event probability few events occur to stimulate or test suitable distribution. Suppose the nation state cognitive tools. It would have done system experienced an existential crisis akin dinosaurs no good to develop behaviors to the fall of the Han Dynasty or the Western suitable for reacting to massive meteor Roman Empire. That would render extinct, strikes. or much reduce and change, the legal Humans, too, show little systems that now claim the highest authority appreciation of the probability-adjusted cost over adjudicating disputes arising in their of a massive meteor strike. Most people fear territories (which, in the final accounting,
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Journal of Special Jurisdictions ULEX: OPEN SOURCE LAW FOR NON-TERRITORIAL GOVERNANCE
cover all of the earth and appreciable protocol community. All need ways to avoid amounts of its seas). It would not likely and resolve disputes. render humans extinct, though; we would Ulex seems to have all the swans continue in new kinds of communities. Here, covered. It might help initiate a gold one or too —perhaps here, especially — the rule of help recover after a black one. And if the law will remain, like health, a crucial but world just keeps rolling along its graceful intangible object of desire. If no dynasty, drunken way, as everybody very rationally empire, or nation state imposes order, it supposes it will, Ulex will come along on must arise from below, from the harmonized that ride too. interactions of many people, across many History has already carried us up to communities, living very different lives even non-territorial communities. These host as they agree on a few simple rules. millions of members and assets worth You can imagine blacker swans —an hundreds of billions. They need law and will actual massive meteor strike, for instance — have to get it somehow. but beyond some limits even the rule of law If the efforts described here play out cannot save humanity. Nature and/or god(s) as planned, these new communities will find have the final word in the contest of life in Ulex the law they sorely want. It only versus death. Short of that ultimate appellate provides the catalyst, of course; the actual action, though, humans will need rules for institution-building remains the job of each coordinating their behaviors when they community. This paper has provided model gather in large communities, where clauses to stimulate the growth of the Ulex strangers often interact, and where wrongful ecosystem and given reason to use them. behavior could harm innocent humans and Friends and fate must take it from here. valuable assets. That could describe a territorial city or a non-territorial distributed
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