# Overview

Nation3 is its own legal system because it has the **power to create and enforce law**.

Traditionally, nation states enforce law within their physical borders (their land). But Nation3 enforces law within its virtual borders, making it the **internet's legal system**. 

The idea is simple: people can enter legal agreements over the internet, secured by Nation3's legal system. In case one of the parties breaches the agreement, they can **open a dispute** and take them to court in Nation3.

## Features

* **Internet-native**: No need to print, fax, pigeon or take a plane to attend a hearing. No need to wait years for a resolution.
* **Professional judges**: The [Nation3 DAO](https://docs.nation3.org/legal-system/dao) elects vetted professionals to resolve disputes. Judges have skin in the game and are incentivized to make fair rulings.
* **Limited liability**: In Nation3, each party entering an agreement deposits crypto as collateral — the maximum amount they can be liable for, in case of breach. No surprises.
* **Checks and balances**: The [Nation3 Constitution](https://docs.nation3.org/legal-system/constitution) lays out the mechanisms for law creation and the separation of powers between the judiciary, the legislative and the executive.
* **High legal standards**: In Nation3 it's unconstitutional to pass law with retroactive effect. Nation3 also adheres to the Universal Declaration of Human Rights.
* **Encrypted and private**: In case of dispute, all communications between the parties and the judges are end-to-end encrypted. And, by law, all evidence must remain private.

## Building blocks

In order for Nation3 to create and enforce law, the following building blocks are required:

* [**Constitution**](https://docs.nation3.org/legal-system/constitution): A fundamental document outlining the powers of the Nation3 state, its governance and its checks and balances.
* **Laws**: The laws to be enforced within the Nation3 jurisdiction.
* **Contracts**: The contracts entered by the Nation3 DAO with key parties (e.g. judges).

{% @mermaid/diagram content="graph LR
Constitution --> Laws
Laws --> Contracts" %}

And the following stakeholders:

* **Citizens**: Ultimately govern Nation3 via the Nation3 DAO.
* **Judges**: Resolve disputes. Elected by the Nation3 DAO.
* **Guardians**: Oversee the work that guild/contractors carry out for the Nation3 DAO. Elected by the Nation3 DAO.

{% @mermaid/diagram content="graph TD
subgraph N3\[Nation3 - all agreements bound by Constitution and law in effect]
Citizens -->|Govern| DAO
DAO -->|Enacts| Constitution
DAO -->|Makes and changes| Law
DAO -->|Elects judges| Court\[Supreme Court]

```
Constitution -->|Takes priority over| Law
Court[Supreme Court] -->|Ensures constitutionality| Law

DAO -->|Funds| Agreements[Stream Agreements]
DAO -->|Elects members| Guardian[Guardian Guild]

Court -->|Enforces terms| Agreements
Providers -->|Provide services| Agreements
Agreements -->|Allows withdrawal| Providers
Guardian -->|Oversees and releases funds| Agreements
```

end" %}