In the very beginning, contracts were developed in Rome. Eventually, deals have become more complicated and vast over time. Businesses currently have contracts and agreements with different companies or parties, and most of them are written on paper.
As the business grows, so will the complexity and extent of its agreements. Many details are faced in getting an agreement to work, timings, conditions, product details, and other crucial information, and when it comes to manual access, it is not only unsafe but also can be tampered as well.
WHAT ARE SMART CONTRACTS EXACTLY?
Smart contracts are made up of code and rules that carry through the needed actions after meeting predefined terms and conditions.
Let’s give an example of proper understanding. Suppose an agreement is signed between two rice production companies and set a lot of rice orders within two months. According to the digital contract (which is created through smart contracts in the blockchain), the conditions are made so that after completing the first bulk of the order on time, the payment will automatically be generated and will transfer funds and complete the order. Smart contracts are fast and secure and reduce the hassle of worrying.
ISSUES THAT MAY ARISE.
There is a long list of different dilemmas caused by manual contracts that are not satisfactory. The first problem with manual contracts is, they can’t be kept for a lifetime. The second is that they are not safe and can be easily tampered with and doctored; the third is, as the agreements shift from one table to another, there is a high chance of data loss, and in the end, no one will be ready to take the blame. Different contracts include different terms and conditions with various timelines, which are quite tricky to look after and maintain.
ADVANTAGES OF SMART CONTRACT-BASED AGREEMENTS
- The first benefit of having smart contracts is the accuracy that records all the respective details, terms, conditions, and timings of every contract and deals accordingly.
- The contract will be visible to both the parties who have signed the agreements and parties can access it as per their need. This is how transparency promotes reliability between companies.
- Through smart contracts, there is no chance of misunderstanding the accuracy of gathering information, eliminating the point of misinterpretation.
- Smart contracts work hand in hand with blockchain and work together to provide data and your deal security
- You will be able to work without paper contracts as well as worry about hassle-free work.
- All transactions will be stored under the system and both parties will be able to see them.
To utilize a smarter way of handling your agreements, ask one of our Blockchain Software consultants today how smart contracts can work for your business.