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ARTICLE · 11 SEPTEMBER 2024

Smart Contracts: Where Are We Now And Does AI Have A Role To Play?

Travers Smith LLP
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Smart contracts have been somewhat eclipsed by the recent focus on artificial intelligence, particularly generative AI. But as we explain below, smart contracts have their uses – and it's possible that in future...

United KingdomTechnology
Samuel Brewer
Samuel Brewer
Richard J Brown
Richard J Brown
Katie Fry-Paul
Katie Fry-Paul
Jonathan Gilmour
Jonathan Gilmour
John Lee
John Lee
Natalie Lewis
Natalie Lewis
James Longster
James Longster
Toby Major
Toby Major
Sarah Robinson
Sarah Robinson
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What is a smart contract and why use one?

The Law Commission's 2021 report into smart contracts defines a "smart legal contract" as:

"a legally binding contract in which some or all of the contractual obligations are defined in and/or performed automatically by a computer program".

A simple and easily relatable example often used to illustrate the concept of smart contracts is the vending machine. Once an individual satisfies the conditions by selecting a product and inserting money, the machine automatically honours the contract by providing the chosen snack. All smart contracts operate on a similar conditional logic – if X, then Y (the X in this vending machine example being the selection and payment and the Y being the automated provision of the chosen snack).

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