Smart Contracts
Today, the expansion of financial transactions and the growth of electronic commerce have led to the development of new frameworks for interparty agreements in international trade. Technological advancement has introduced new instruments into the financial system. In modern societies, there is a growing emphasis on concluding contracts that are executed in the simplest possible manner, involve minimal payment costs, operate without human intervention, and adhere to international standards.
Applications of Smart Contracts in Law and Business
Smart contracts represent the most advanced form of electronic contracts and are executed through blockchain technology and artificial intelligence. The implementation of such contracts within legal systems introduces new and complex dimensions. Participation in international electronic commerce requires the adoption of modern technological tools and the amendment of relevant domestic laws.
Smart contracts are structured digital agreements in which all contractual obligations are executed automatically. These contracts are designed to enable valid and secure transactions while preventing third-party interference. They are computer-based, and all negotiations and execution occur through digital processes.
Smart contracts possess distinctive characteristics that play a significant role in the development of modern payment systems. Self execution and decentralization are among their most important features. The primary effects of these contracts include enhanced security, increased transaction speed and accuracy, and a substantial reduction in transaction costs. The regulatory framework of electronic commerce law encompasses many of the concepts and issues related to smart contracts. Matters such as applicable law, competent jurisdiction, contract interpretation, and contractual guarantees are among the most significant and emerging legal topics in this field.
Frequently Asked Questions About Smart Contracts
A smart contract is a digital contract that operates on a blockchain and executes its terms automatically without human intervention. These contracts are immutable; once recorded, all conditions and obligations are satisfied automatically.
Key advantages include automated execution of obligations, reduced intermediary costs, high transaction speed, enhanced security, and fraud prevention. These features make smart contracts an attractive option for electronic commerce.
Smart contracts are applied in various sectors, including banking, insurance, international trade, supply chain management, real estate, and even electronic voting systems.
Smart contracts have not yet been fully regulated under Iranian law. However, as they fall within the broader category of electronic contracts, many related issues may be analyzed and interpreted under the Electronic Commerce Law.
In traditional contracts, the execution of obligations requires human oversight and enforcement mechanisms. In contrast, smart contracts are executed automatically once deployed on the blockchain, with no possibility of alteration or non-performance. What is a smart contract?
What are the advantages of smart contracts?
In which fields are smart contracts used?
Are smart contracts legally recognized in Iran?
What is the difference between a smart contract and a traditional contract?
