If distributed and decentralized it also runs across a common issue with courts - the ‘make me’ problem.

If someone buys product x from seller y, which is based on some decentralized ‘contract’ which is defacto enforced by every node of the network independently - and that product then produces a unjust outcome.

You go to court, but what if Y is just a node on the network? And everyone involved is outside the courts jurisdiction? what can an adverse court judgement actually accomplish? It can’t roll back the network activity to fix the smart contract without everyone’s consent - and that seems unlikely. It can declare product X illegal or fine seller Y - but if they have no way to enforce it, what’s the point?

If the seller Y is identifiable but simply abroad, then there are various cross-country agreements that would allow to use the legal process in their country to collect money from them in various ways, especially if there's a lot of money at stake - like the $10M discussed in the article.

If the seller is unidentified, then it is possible to get a judgement and work on identifying them. If it's not just a civil dispute but felony fraud, then law enforcement might identify them some years later, it happens.

Of course, if everyone involved is properly anonymous then it's very, very hard to enforce anything, and takes enough effort and money so that it's not worth the hassle for small amounts, so for that there's simply some 'caveat emptor' in dealing with foreign anonymnous sellers. If you defraud $10 off of someone across the ocean, you are likely to get away with this. But for large cases of fraud? Everyone makes mistakes now and them that may allow them to get identified, and such fraud can be prosecuted many years later.

I doubt the judge is going to care that the “contract” passed through a bunch of different peoples hands (nodes in a network). They could still fine the seller or order them to return the funds to X.

If Y can’t be hauled into court because they are in another country or you just don’t know their identity, well that isn’t a problem specific to these “distributed smart contracts.”

It is actually a problem specific to these types of contracts. It is very difficult to nearly impossible for me to get money to a company somewhere right now in a way that doesn’t surface who they are and where they are at in some really obvious (and traceable) way - part of the US War on Terror is the anti money laundering, and know your customer rules and heavy handed enforcement of US financial control.

In this case, you send some ether somewhere.

If a US or EU court finds participants of said node criminally or financially liable and the political will exists (which will happen when someone important enough gets screwed over by a bad contract) they may be deported, face criminal prosecution, be banned from transacting with US financial entities, etc.

Those things are not a small deal.

Lots of if’s and May’s there - and that’s true of a ton of things in crypto. It took nearly a decade before the SEC or IRS would even provide basic guidance on what the heck crypto even was in their eyes. Lots of deals gonna happen, lots of fortunes made and lost in that gap.