International Construction Law Review
“GOOD THINKING 99”: IT’S TIME TO GET SMART ON SMART CONTRACTS
JOSEPH XUEREB1
Associate at MinterEllison
ABSTRACT
The construction industry is the second least digitalised among all sectors. One such area where digitalisation is needed is in the area of construction contracts. This article suggests that the time is ripe for industry to trial the use of smart contracts – electronic contracts in which some of the contractual terms are defined in and performed automatically by a computer program. This article investigates global best practices in relation to smart contracts and concludes with recommendations to increase the uptake of smart contracts in megaprojects. The ultimate proposal is to move away from the 1,000-page wet-signed contract left in the drawer to a smart contract legible by computer programmers and lawyers.
I. INTRODUCTION
Australia’s national science agency, the Commonwealth Scientific and Industrial Research Organisation (“CSIRO”) published a report in 2022 which predicts global megatrends. These global megatrends reflect the intersection of multiple emerging social, economic, environmental and technological trends and will typically unfold over decades.2 The report identified two notable megatrends which will affect the megaproject industry.
The first megatrend is the adoption of digital technologies.3 High-performance computing, machine learning, the Internet of Things (“IoT”)
1 Joseph Xuereb, Associate at MinterEllison. Any omissions or errors are those of the author (email joseph.xuereb@minterelllison.com).
2 On 1 September 2022, Claire Naughtin, senior research consultant at CSIRO Data61, stated at the 2022 Job and Skills summit that the megatrends were akin to a “rip current at the beach”. Australian Financial Review, “Albanese says multi-employer deals not about giving unions more power” (webpage, 1 September 2022) (https://www.afr.com/politics/federal/business-union-movement-reach-agreement-
as-jobs-summit-begins-20220901-p5beg3?post=p543gx last accessed 29 November 2023).
3 CSIRO, Our Future World: Global Megatrends Impacting the Way We Live Over Coming Decades (Report, July 2022) 29 (https://www.csiro.au/en/research/technology-space/data/Our-Future-World last accessed 29 November 2023).
Pt 1] “Good Thinking 99”: It’s Time to Get Smart on Smart Contracts
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