Towards a blockchain-enabled automated construction contract
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Abstract
David Greenwood's keynote at the CBC 2023 conference ellaborates on the potential application of blockchain and smart contracts to address perennial challenges within the construction industry, particularly focusing on contract management. Greenwood, from Northumbria University, presents an elaborate discussion on how these emerging technologies could revolutionize the sector by enhancing efficiency, transparency, and trust in construction contracts. The presentation outlines the current issues plaguing contract administration, such as poor contract management, the lack of clarity and fairness in contracts, and the difficulty in executing contract processes.
Greenwood references significant contributions by PhD student Mahir Mell and revisits historical critiques and suggestions regarding the evolution of construction contracts, highlighting the persistent search for certainty and fairness in contractual engagements. He notes the speculative yet insightful prediction made thirty years ago about contracts being executed in computer code, a premise increasingly becoming a reality with the advent of blockchain technology.
By examining various prototypes and products that integrate smart contracts within the construction sector, Greenwood offers a glimpse into how automation and digitalization could potentially streamline contract drafting, execution, and management. Products like Kira Systems, I Contract, Accord Project, and Weather Ledger exemplify the current strides towards integrating blockchain technology for enhanced contract management and dispute resolution.
Greenwood discusses the technological underpinnings of blockchain, emphasizing its features such as decentralization, transparency, immutability, and enhanced security. He argues that these features are poised to address core issues in construction contract management by promoting a transparent, secure, and equitable environment for executing contracts. Through the application of blockchain, the construction industry could witness a significant reduction in disputes, claims, and associated costs, fostering a more collaborative and trusting environment among stakeholders.
The presentation further explores the practicalities of applying blockchain to manage FIDIC 2017 contract claims, detailing the process of codifying contract conditions into machine-readable code and integrating them within a blockchain infrastructure. Greenwood highlights the potential barriers to adoption, including technical limitations, legal challenges, and social resistance to change, while expressing optimism about overcoming these hurdles through continued innovation and collaboration within the industry.
In summary, the keynote provides a compelling argument for the adoption of blockchain and smart contracts in construction contract management. By addressing the technological, legal, and social dimensions of this innovation, Greenwood lays out a roadmap for a future where construction contracts are more efficiently managed, disputes are minimized, and trust is restored among project stakeholders.
Keywords
Blockchain, Smart Contracts, Construction Contracts, Contract Management, Technology Adoption.
