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Document

Uploaded by

Rekha Singh
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© © All Rights Reserved
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INTRODUCTION

Two quickly developing technologies that could completely transform a number of sectors are
smart contracts and artificial intelligence (AI). Artificial intellect is the process of simulating
human intellect through algorithms and computer systems to carry out tasks like problem solving
and decision making that normally need human cognition. However, smart contracts—which
usually make use of block chain technology—are digital agreements that can be enforced and run
on their own. By eliminating the need for middlemen and boosting process speed and security,
the combination of artificial intelligence (AI) with smart contracts holds enormous promise for
improving transaction efficiency and accuracy. While smart contracts can be used to automate
the execution of those contracts, artificial intelligence (AI) can be utilized to analyze and
comprehend complex contracts.
With the huge volume of transactions and the requirement for accuracy and speed, this can be
especially helpful in the financial, insurance, and real estate sectors. Both artificial intelligence
(AI) and smart contracts are being utilized in harmony to automate and streamline a variety of
activities in the modern world. AI is the term used to describe a machine’s capacity to carry out
operations like learning, decision-making, and problem-solving that would typically need human
intellect. Computer vision, natural language processing, and robotics are examples of AI
technologies. On the other hand, smart contracts are self-executing agreements where the
conditions of the deal are explicitly encoded into code. The blockchain technology that underpins
smart contracts allows for the development of a safe.Blockchain technology, which facilitates the
development of a safe, decentralized transaction ledger, is linked to smart contracts.
Use of Artificial Intelligence and Smart Contracts:
The topic of supply chain management is one possible setting for artificial intelligence and smart
contracts. Smart contracts, which are activated by certain events like the arrival of a shipment or
the completion of a payment, can be used by a business, for instance, to automate the process of
buying items from suppliers. Artificial intelligence (AI) has the potential to optimize processes
and lower the likelihood of errors or delays in the supply chain by analyzing data such as
delivery times and costs.
The financial Industry is another example of the application of AI and smart contracts, as they
have the potential to automate the trading and execution of financial products. A smart contract
might, for instance, be used to automatically carry out a trade in response to specific events, like
a change in a security’s market price. Artificial Intelligence (AI) has the potential to analyze
market patterns and provide trading advice. All things considered, using AI and smart contracts
can greatly automate and streamline a number of procedures, increasing productivity and
lowering the possibility of mistakes and disagreements.
Smart Contracts’ legal validity:
Due to their operation in a legal limbo, smart contracts’ legitimacy is still up for debate. In the
US, some states have approved laws acknowledging the legality of smart contracts, but other
governments have not yet tackled the matter. Regarding the legal standing of smart contracts,
there is also disagreement on a global scale. Since there is currently no central body overseeing
smart contracts, one of the primary obstacles to their legality is that their enforcement in
conventional legal systems is challenging. It’s also possible that some jurisdictions won’t
recognize smart contracts as legally binding, which might put parties depending on them at
danger.
Even with these difficulties, smart contracts are beginning to be recognized for their potential
advantages, and as the technology advances, it’s possible that their legal standing will change as
well[1]. It is crucial that people and companies understand the possible drawbacks and hazards
associated with smart contracts and obtain legal counsel before using them in any kind of
transaction.

Advantages of Smart Contracts:


One of the key advantages of integrating AI with smart contracts is the capacity to automate and
optimize procedures, decreasing the need for middlemen and boosting transaction efficiency. AI,
for instance, can be used to analyze vast volumes of data and spot trends and patterns that could
be difficult for humans to see[2]. In the case of smart contracts, this can be helpful because it can
assist parties in identifying any problems or dangers prior to signing a contract. Furthermore,
there’s a chance that using AI and smart contracts will lower the possibility of transaction fraud
or errors. Smart contracts can be written to automatically carry out specific activities based on
predetermined criteria. They are self-executing and enforceable. Because the contract is carried
out in accordance with the terms that the parties have agreed upon, this can help to lower the
possibility of fraud or human error.
Self-executing and enforceable, or “smart contracts,” can be configured to carry out specific
tasks automatically in response to predetermined criteria [KCO1]. Since the contract is being
executed in accordance with the terms that have been agreed upon by the parties, this can help to
lower the possibility of fraud or human error.
Enhanced Efficiency: Transaction completion time and effort can be decreased thanks to smart
contracts’ ability to automate and simplify procedures. For both individuals and corporations,
this may lead to higher production and efficiency. Smart contracts have the potential to
streamline the banking industry by automating trade execution and settlement, hence decreasing
transaction time and effort. Both organizations and people stand to gain significantly from this as
it can speed up and boost the efficiency of transactions.
Enhanced Security: Blockchain technology, which offers a transparent and safe platform for
contract execution, is commonly used to carry out smart contracts. By doing this, the possibility
of fraud or contract manipulation may be decreased. Smart contracts, for instance, can be used in
the supply chain sector to track and confirm the authenticity of goods, lowering the possibility of
fraud or tampering. Both consumers and organizations may benefit greatly from this since it can
help to improve transaction security and dependability.
Are Smart Contracts Going to Replace Attorneys?
Many manual activities, such as creating and executing contracts, might be greatly streamlined
and automated with the help of smart contracts. For the time being nevertheless, it is doubtful
that they will totally take over the function of attorneys. The conditions incorporated into the
coding of smart contracts ultimately determine how much automation they can achieve.
Consequently, it is possible that they will be unable to take into consideration every subtlety and
complexity that may emerge in legal circumstances[6]. Attorneys, on the other hand, are
educated to analyze and interpret the law as well as recognize and handle possible problems that
would be challenging to codify. Furthermore, as smart contracts are still a relatively new
technology, there might be some legal and regulatory concerns that must be resolved before they
are extensively used. In order to navigate these challenges and guarantee that smart contracts are
utilized fairly and in accordance with the law, lawyers will probably be very important.
Ultimately, smart contracts are unlikely to totally replace the job of attorneys in the legal system,
even if they have the potential to transform the creation and execution of contracts.
Conclusion
Two technologies that have the potential to drastically change and simplify several procedures
across a wide range of sectors are artificial intelligence (AI) and smart contracts. Artificial
Intelligence (AI) is the ability of machines to carry out tasks that would typically need human
intelligence. It can be used for process optimization, data analysis, and decision-making. A
variety of transactions, such as those involving financial instruments, supply chain management,
and identity verification, can be automated and secured with them [KCO8]. All things
considered, the application of AI and smart contracts has the potential to greatly increase
productivity and lower the likelihood of mistakes and disagreements. But it’s crucial to make
sure that these technologies are applied impartially, fairly, and in an ethical manner. As they
proceed it’s intresting to see how they are used in the future in all of its creative and
revolutionary forms as they develop and become more widely accepted.

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