52 For example, when selling real estate, payment will be automatically transferred from the buyer to the seller, as well as a request to update the ownership at the Land Authority, without the involvement of a third party such as a commercial bank or governmental authorities. The Smart Contract is considered a reliable legal instrument since, due to its structure, the contract cannot be changed without the consent of all parties and cannot be hacked due to the decentralization of its details in the blockchain. Moreover, the contract is updated automatically as the transaction advances. Related Challenges The drafting of a Smart Contract requires the pre-definition of its terms so it will include any scenarios that may occur throughout the relevant period. The parties are required to predict in advance a wide-range of circumstances that may occur and to include them within the Smart Contract's terms. In addition, since Smart Contracts are based on code, they are created by qualified programmers and require powerful computer systems. Once a Smart Contract's code is sent to the blockchain, it is immutable and any modification is impossible. The only way to 'modify' a Smart Contract is to cancel the original version and draft an entirely new contract. It may be difficult to convert ordinary and specific legal language to code (e.g. the terms "in good faith" and "with reasonable effort") and the system may interpret the contract differently than a human being would have interpreted it. Since there is no intervention of intermediaries such as banks or related authorities (governmental or others) in Smart Contracts, if and when required, the accompanying procedures may lack 'supervision' or review, and the execution may partially fail. Hybrid Contracts Due to the challenges related to Smart Contracts as described above, including the need to encode the contract on all its clauses upon its preparation, currently, the preferred solution is to combine a Smart
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