This paper presents a comprehensive investigation into the role, functionalities, and complexities of blockchain oracles, focusing particularly on the implications for smart contracts in legal reasoning contexts. Oracles serve as a vital bridge to smart contracts' inability to interact with external or "off-chain"data, enabling them to be used in a variety of real-world situations. Oracle's integration, however, introduces a number of complexities, including security vulnerabilities, collectively referred to as the Oracle Problem. In addition to a review of existing literature, we also provide a mathematical analysis quantifying the computational complexity associated with automating legal reasoning and a novel design framework aimed at establishing oracles that are secure, efficient, and legally compliant. The paper aims to serve as a foundational text for researchers, legal practitioners, and blockchain developers, advancing the academic discourse surrounding blockchain oracles and their role in smart contracts.