As procedures become more digitised, how to build secure, digital business agreements it’s become nowadays a widely discussed topic. Smart contracts are the ideal platform for business innovation and to enable sustainable business models. They are legally binding contracts, in which some or all of the obligations are recorded in and/or performed automatically by a computer program.
Differently from traditional contracts, they are self-executing and self-enforcing and often can be deployed on distributed ledger technology, such as blockchain where data is stored on a public database, and cannot be changed. The transactions can be sent automatically without a third party to deal with the verification and enforcement of the contract.
In 2021 the Law Commission in the UK confirmed that “The current legal framework is clearly able to facilitate and support the use of Smart legal contracts“. During the podcast ‘Brain Food for General Counsel’, by Pinsent Masons, interesting causes for reflection about how Smart contracts can help General Counsel to innovate in corporate environments, emerged. The journalist Matthew Magee invited Luigi Telesca, our CEO and founder of Trakti, Sally Guyer, Global CEO for World CC, and David Halliwell, Director of Client Solutions for Pinsent Masons, to talk about this topic.
For Luigi Telesca the General Counsel can see Smart contracts “as a binder of information, not only about the deal they have signed but also how actually the deal is processed (…) they can understand if the connection with a counterparty is improving all the time (…) it becomes a dynamic object. They can get information about intangible assets, trust, quality, and reciprocity of the relationship. Things today are not there because they are scattered between different systems, and they’re not providing data real-time but the data is inputted manually by people that are interpreting the value maybe with some mistakes, while the system can actually get the data automatically.” (03:21)
Telesca added: “By creating automation, they can actually focus on what matters to the business, avoiding cost litigation and reducing risk. The contract will be able to mitigate risk by getting real-time data, it will give immediate indicators to General Counsel on which contract deserves attention or not, before the risk or the problem is created.” (06:06)
“Everything is automatic” – Sally Guyer stated – ”We don’t have to go through a process of manually assessing whether a delivery was late or was on time (…) A Smart contract approach just eliminates that back and forth of emails through various different departments (…) I think it will change the legal function, very much for the better. Many of the organisations and legal functions we work with at WorldCC, are desperately trying to eliminate a lot of that bureaucracy and admin.” (06:56)
Smart contracts have the potential to really turbocharge the legal team, David Halliwell commented: “Not only lots of processes around contracting can be automated but also they will provide the legal team with volumes of data about the risk position of the organisation which will enable a legal team to really become more strategic. They will be able to analyse where contracts risk sit.” (08:12)
Sally Guyer concluded by saying that “We’re moving away from the artisan approach to contracting to a much more scientific approach(…) The ability of Smart contracts is to eliminate that artisan approach.” (13:43)
Trakti Smart contract can innovate contract management facilitating the verification, control, or execution of an agreement:
- Smart contracts do not need intermediaries to confirm the agreement, which results in cost savings and risks cut;
- All the documents stored on blockchain are duplicated multiple times, originals can be restored in the event of any data loss;
- Smart contracts are encrypted to keep all the documents safe;
- Task automation saves hours of manual procedures and eliminates risk of errors.
By automating contracts, you can streamline processes, automate rules and payments, track all changes, offers, approvals and reviews. With a unified end-to-end platform as Trakti, you can take control of 30+ features and manage your contracts from start to end, payments and e-signature included. Every single activity of a negotiation is recorded in secure audit trails in a fully compliant way. You can easily and immediately reconstruct the relational and authorization history of the negotiation and produce compliance reports in a click. In contract automation, it is vital for many contractual agreements to have relevant information from the outside world. Smart Contract Oracles are the bridge that connects blockchain to real-world data.
Trakti offers open APIs to easily integrate our platform with third party services, facilitating the sharing of all information with your preferred systems. Smart contracts can help to improve compliance, facilitate collaboration, reduce costs and risk: all in one, user-friendly, fully customizable and compliant no-code platform, accessible also to those who have no coding skills.
Deals made easy with Trakti.
To listen to the whole podcast, click the link: https://link.chtbl.com/1gwoH7EV