Smart contracts are the tech topic du jour, considered by many to be one of the most promising applications of blockchain. Smart contracts are being considered for use in various industries, and the legal services industry is no exception. So what are smart contracts? And how can they be used in the legal sector? Although there are numerous possible applications of smart contracts, this article focuses on their applicability and challenges for being used as technology tools in helping execute and perform legal agreements (aka “smart legal contracts”).
Blockchain and Smart Contracts
There is no settled definition of the term “blockchain,” but the various implementations of blockchain technology share certain characteristics. According to NIST, “Blockchains are distributed digital ledgers of cryptographically signed transactions that are grouped into blocks,” where each “block is cryptographically linked to the previous one after validation and undergoing a consensus decision.” New blocks get replicated across all copies of the ledger, and “any conflicts are resolved automatically using established rules.”
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