However, if you let all parties review the smart contract (the source is on the chain, you can check it) and agree with it's workings and sign a 'human' contract saying you do agree and then it goes wrong, I think it should be an out. We do not have proper ways to sue for misbehaving software (it happens all the time but MSFT is climbing higher and higher): this is easier to verify but we are adults here: if you agree to put money in smart contracts, you should have verified the code. And if you think the code is flawed, do not put money: otherwise do not complain afterwards. It is not that hard.
That's not how it works. Courts generally operate by ambiguous standard of what reasonable people and reasonable experts can actually do given the state of technology.
No reasonable software engineer can tell you that a piece of code is flawless. I don't think courts will agree on a system that has been shown through evidence to be highly flawed.
Obviously this doesn't allow you get around laws such as warranties but I don't see why it can't be used if everyone agrees to it.
If you sign a contract to abide by a smart contract that was designed in bad faith or misrepresented I fail to see how that's any different.
Even valid contracts are bound by the law. E.G. you can't sell yourself into slavery. Similarly, a smart contract can be a tool to execute the terms of a legal contract, but if it behaves in a way that would be illegal under a traditional contract I doubt any court in the US or Europe is going to recognize that as legal.
I admit enforcement is another issue entirely though.
Fraud, for example, isn't legal even if you have a cleverly crafted contract that uses wording tricks to technically be true.
I would expect a court to take a dim view of a smart contract that has an obfuscated, non-obvious mechanism for someone to siphon off all the money in an undisclosed fashion. "Code is law", but so's "you can't defraud people".
You are begging the question by presupposing that for every smart contract there could be a possible legal contract that can bind the people who sign it to the results of the smart contract.
If a smart contract is illegal, then any written contract that binds people to the results of that contract would be similarly illegal.
If your mechanic installs the tires in the passenger cabin, no one cares about the mechanics' lien. Depending on the judge they might not even care about the fine print on the back of the invoice, because installing tires in the passenger compartment is that dumb.
