Smart Contracts
Smart contracts have the ability to transform how property is bought and sold. Smart contracts work on the blockchain. In this section you will find out how they work.
What is blockchain?
Blockchain in simple terms are several transactions that have been verified by numerous validators and grouped together as a block of data. Each block of data is encrypted and time stamped then added to the blockchain. This process makes it impossible to tamper with.
What are smart contracts?
Smart contracts are contracts that use computer code to automate processes. This removes the need for paperwork and speeds up transactions by sharing information with all parties. Smart contracts use blockchain technology. This makes them fast, efficient and secure.
How do they work?
In property the conveyancing process can be broken down into several steps. At each step a party is selected to perform a duty within a given time period. Failure to complete the task within the time period will result in a penalty. These penalties and timescales to perform them are agreed by all parties before entering into the contract.
How efficient are they?
Smart contracts can be very efficient. A well thought out contract will greatly reduce the time it takes to transfer ownership of property. This is because all parties involved in the transaction will come together with a collective goal.
​Who is involved?
All people involved in the process can be written into the contract. This not only includes the buyer, the seller, and their respective solicitors, it can also include the lender, the surveyors, and any other interested parties.
Are contracts binding?
Yes. Breaking a contract will likely result in a penalty. With smart contracts the buyer and seller are committed to completing the transaction providing there are no nasty surprises during the conveyancing process. This is unlike the current conveyancing process where either party can pull out prior to exchange of contracts.