Smart Contracts: How Computer Programs And Blockchain Could Affect M&A

Smart contracts, which replace traditional paper documents with a computer program that automatically verifies and executes an agreement, are poised to fundamentally alter the way M&A and contract-based legal work is performed. Think of a smart contract as a small army of robot lawyers and accountants: once the parties agree to terms, these robots automatically implement the agreement's terms (e.g., payment, termination, etc.) as each party performs, or does not perform, their end of the bargain.

What is blockchain?

Blockchain, the technology underlying smart contracts, is a nearly unalterable, decentralized system that implements, verifies and records transactions. By making use of this technology, smart contracts have the potential to drastically reduce the need for lawyers, accountants and other professionals that currently perform that work. Blockchain is already predicted to reduce finance companies' transaction and infrastructure costs by over 50%, amounting