Law

The idea underlying smart contracts is that software can automate the contracting process, which allows for the performance, monitoring, and enforcement of contractual promises without human involvement

Contract automation can significantly lower the operating costs of businesses. Smart contracts are coded to be self-executing, so if conditions A and B occur and are verified by the blockchain, then cryptocurrency is automatically unlocked and becomes controlled by the other party

It eliminates manual error in contract drafting and execution

It enables parties to more efficiently structure their relationships – example, automatic verification of a contractor’s work allows the contractor to be paid quickly, preventing unnecessary delays

It can greatly reduce or even eliminate the need for litigation and courts – by using a smart contract, parties commit themselves to be bound by the rules and determinations of the underlying code, removing the potential for parties to have a dispute