Determining What Next to Automate in the Development of Smart Contracts in Construction: Five Principles for Guiding Incremental Change

Abstract

Existing research on smart contracts in construction primarily concentrates on their operational stage and the mechanics of their potential operation. The response to the question “Can we do it?” is a resounding yes. The next question to answer is “How do we do it?” The answer to this question involves a consideration of the adoption of smart contracts and their synthesis with the entire construction process, from procurement to the in-use phase. Particular attention is needed for integration into complementary and receptive working practices resulting in optimum conditions for adoption. The current risk is that smart contract adoption may suffer from a lack of clear guidance and occur on a piecemeal and ad hoc basis. This study proposes a principled approach to counter this risk. This approach has been seen before in construction law in the form of the Abrahamson principles, which are a seminal reference point in any discussion of construction law. A framework is proposed, based on five key principles, to guide the automation of contract terms, highlighting the importance of control, codifiability, consideration, efficiency, and data access. The approach uses an interdisciplinary methodology with an applied professional constituency to promote law reform–based research. The inductive/deductive approach aims to share insights with the hope that the resulting principles will aid in the incremental implementation of smart contracts in the industry.