Smart Contracts in Iranian Private Law: Theoretical Foundations and Executive Framework

Abstract

A smart contract is considered a form of electronic contract, distinctly characterized by the automated execution of certain contractual provisions. This technology was first introduced in the 1990s by an individual named Nick, and in practical terms, it emerged in 2008 alongside the introduction of the blockchain structure and the cryptocurrency Bitcoin. Smart contract technology has been developed utilizing crucial foundational technologies, the most prominent of which include digital signatures, distributed ledgers and blockchain, cryptocurrencies, and artificial intelligence. The current study is based on a descriptive-analytical method and documentary research, utilizing contemporary library and internet resources. Smart contracts possess significant characteristics and features, the most crucial of which can be identified as their entirely electronic nature, software-based structure, precision, conditionality, self-executability, and self-sufficiency. Smart contracts not only facilitate the fulfillment of customary contractual terms—such as payment conditions, preservation of confidentiality, and contract termination—but also minimize both accidental and intentional exceptions, thereby eliminating the need for trusted executive intermediaries. The results indicated that one of the major achievements of smart contracts is the utilization of pre-configured computer programs (templates) that allow contracting parties to select contractual terms. This approach leads to the standardization of contracts based on pre-fabricated templates (analogous contracts). Although it is anticipated that a substantial number of disputes in the realm of international contracts will diminish—due to the self-executing capabilities and data storage of smart contracts based on distributed ledgers, the immutability of transaction data on the blockchain, and the verification of the proper execution of contractual terms via the Internet of Things (IoT) and artificial intelligence—legal disputes in this domain will not be entirely eradicated; rather, new forms of litigation and challenges will be introduced to international judicial institutions.