Intelligent Contracts and the Construction Industry

Advances in technology have resulted in a fast-changing landscape for construction contracts. Lawyers struggle to keep up with the pace of innovation, the need to provide legal solutions and accommodate new approaches. Building information modeling (BIM) has become part of the common parlance in construction notwithstanding limited evidence of its impact on the ground. Intelligent contracts appear as a logical extension to BIM whereby the contractual performance itself becomes automated. However, intelligent contracts work best where they are short term or are of instantaneous effect. This is at odds with the complicated and long-running nature of construction projects. Further, storage constraints, compatibility, and reliability issues together with confidentiality and the long-term nature of distributed ledgers pose additional problems. This work discusses what could be achieved in the construction industry by the adoption of intelligent contracts. An online forum provided secondary data to give soundings on the issues raised. The objectives are to introduce aspects of technological advancement within commerce generally and to make connections with best practice and limitations within construction. The hypothesis advanced is that certain aspects of the construction contract cannot be fully intelligent and the best that can be achieved in the short to medium term is a semiautomated position. Further, intelligent contracts should be viewed as part of the BIM-led revolution in construction and not separate from it. The recommendation is that incremental advances such as the coding of project management and contract administration data be targeted to provide improved operational efficiency and value savings.