Smart Contract
Strict Definition
"Self-executing code stored on a blockchain that automatically performs actions when predefined conditions are met. They function as 'Digital SLAs' that require no human intervention for enforcement."
Liability Check // Risk Analysis
The risk is 'Code as Law.' If the code contains a logic error or a security vulnerability, the contract will execute exactly as written, even if the result is catastrophic. These are often referred to as 'Smart Contract Hacks'.
Knowledge Context // Related Terms
Auditor NotesVS-AN-2026
"Use smart contracts to automate high-frequency, low-trust operations like royalty distributions or supply chain milestones."
"Never deploy unaudited code. Implement 'Pause' mechanisms (Circuit Breakers) to stop execution in case an anomaly is detected."
"Ensure the legal intent of the agreement is reflected in a master 'Ricardian' contract that takes precedence over the code in event of a dispute."
SCHEMA_VER: AEO_3.2
LAST_AUDIT: 1/8/2026
HASH: D4F1PM