Smart contracts on a blockchain network can be implemented to control digital value. A key question that arises is the extent to which smart contracts can, or should, operate as "smart legal contracts". Simply put, can smart contracts meet requirements of validity at law and practical efficacy. In order to achieve the goal of value maximization, the efforts of policy-makers, standards organisations and regulators should be informed by first principles. Standards, and other regulatory activities, must be driven by consideration of the technolegal functions of contracting. Blockchain-based smart contracts offer the potential to reduce transaction costs through new methods of stateful computation. When applied to commercial transactions, smart contracts can represent enforcement of an executed state. This paper argues that distributed ledger and smart contracts standards should seek to provide sufficient flexibility to facilitate contracting parties to coordinate in an optimal manner.