Just because something is brand new, and does not have laws or regulations relating to it right now does not mean that people can simply do whatever they want.

Well, it's a bit more complicated than that.

When people say that some things (like the blockchain) are outside of the law, they don't usually mean that no one can be sued or that the courts won't try to enforce judgements. What they mean is that those things are hard for the law to reach. A court might issue a judgement but it won't be able to enforce it. The general idea is that enforcement is so difficult and expensive so that it's not worth it.

For a simple example, consider piracy (of the IP kind). It is very much illegal and... so what? I can still go online and download the latest movie in a few minutes. It's not that the FBI can't bust me if it really wants to. It can. But it's inefficient and cost-prohibitive.

As to smart contracts, that's just a misnomer. They are not contracts. They are determistic mechanisms, set up for a particular purpose. Bespoke machines, if you wish. A contract in law implies a meeting of the minds which these algorithms cannot provide. Instead, they offer a guarantee that if you do A, B happens.

They are more akin to vending machines: you feed in some money and you get the item. It's not a contract between you and the vendor -- it's just a machine which you used.