Overcoming the legal barriers to the implementation of smart contracts in the construction industry: the emergence of a practice and research agenda

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Abstract

The construction industry is one of the most critical sectors of the global economy, contributing significantly to economic growth and job creation. The industry has been known to be a slow adopter of technology; however, advancements in digitalization and automation are presenting new opportunities for the sector. One of the recent innovations in the construction industry is the implementation of smart contracts. Smart contracts are self-executing contracts that are executed automatically when pre-determined conditions are met [1]. They are digital programs stored on a blockchain network and are considered as legally binding agreements between parties. Smart contracts have the potential to revolutionize the construction industry by streamlining the contracting process, reducing transaction costs, and improving transparency and trust among parties [2]. However, the implementation of smart contracts in the construction industry faces significant legal barriers that need to be overcome before they can be widely adopted [3] This article will critically appraise the legal barriers to the implementation of smart contracts in the construction industry. The article starts with an overview of smart contracts, followed by a review of the literature on the benefits of smart contracts in the construction industry. The article will then cover the legal issues related to the enforceability of smart contracts, data protection, and privacy, intellectual property rights, and dispute resolution. The role of lawyers in helping construction clients overcome legal obstacles to the implementation of smart contracts and a future research agenda are proffered.
Original languageEnglish
Article number594
Number of pages7
JournalBuildings
Volume13
Issue number3
DOIs
Publication statusPublished - 23 Feb 2023

Keywords

  • construction industry
  • smart contracts
  • building projects

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