One Reason for Lawyers

Business 2.0 reports on Negonation, a Spanish startup that will offer legally-enforceable online contracts.

What’s interesting is their proposed solution to the enforcement problem:

“The biggest problem with online contracts now is enforcement,” says David Blanco, the Madrid-based CEO of Negonation. “If you reach an agreement with another person and something goes wrong, how do you enforce the contract and in which jurisdiction? How do you know the true identity of someone calling himself snake69@hotmail.com?”

To solve that kind of problem, Tractis will offer a comprehensive range of trust and verification systems – and take advantage of controversial national ID cards. There are already 600,000 of the cards issued in Spain; similar ones are compulsory in Belgium, Germany, and Portugal. The United Kingdom is set to roll them out in 2010. Insert your ID card into a smartcard reader and Tractis will instantly verify it with your country’s database.

What’s the chance that this type of system – implemented by Negonation or another provider – will solve the enforcement problem for contracts? The writer confuses the enforcement problem with the identification problem. When contracts are violated, how are the violations adjudicated? Pistols at dawn?