A pilot study on developing smart contracts in the construction industry: Establishing strategies for improving standard contract terms in the Korean Construction Engineering Industry

Abstract

Blockchain technology, particularly smart contracts, is revolutionizing industries by automating contract processes, reducing costs, and enhancing data security. In the construction industry, where contracts are vital across planning, design, construction, and maintenance, smart contracts address challenges such as high management costs and fraud risks. This study examines the integration of smart contracts into Korea's construction sector, focusing on converting traditional contract terms into executable code. Through the analysis of standard contracts, 15 problematic factors were identified, including "Uncertainty in inspection criteria," "Uncertainty in worker replacement regulations," and "Unfair tasks during the period of agreement suspension." Proposed strategies prioritize improving efficiency and fairness in contract management. The study lays the foundation for a smart contract platform that automates execution, streamlines processes, and reduces disputes. The adoption of smart contracts is expected to enhance project productivity, cost-efficiency, and Korea's competitiveness in advanced contract technologies.