Blockchain Boost For 'Smart' Contracts

• Published date: 23 January 2020
• Subject Matter: Corporate/Commercial Law, Real Estate and Construction, Technology, Contracts and Commercial Law, Construction & Planning, Fin Tech
• Law Firm: Dentons
• Author: Mr Lampros Stougiannos, Tracey Summerell and Mark Macaulay

Lampros Stougiannos warns that the rapidly developing uptake of digital technologies across industries, including BIM in construction, allied to a more collaborative approach to project execution, will force changes to contracts. Throw blockchain into the mix, and 'smart contracts' are not far off.

KEY POINTS

• New technologies are being rapidly deployed within the construction industry
• BIM (building information modeling) software is being used not only to enable 3D modeling of a project but also as a platform for collaboration amongst project participants and for information storage/exchange
• Blockchain renders digital information more secure, traceable and incorruptible
• The increased adoption of BIM, as well as collaborative construction execution practices, will require changes to construction contracts
• The combination of BIM and Blockchain technology, together with the desire for greater collaboration and transparency among project participants, could spur the development of 'smart' construction contracts

While the global construction industry has been criticized for being too slow to innovate, the last several years have seen it embrace new technologies, leading to the adoption of new processes which are having a significant impact on the execution of construction projects. These technologies can be divided into two broad categories: software and hardware. On the hardware front, technologies such as autonomous vehicles and robotics (ie drones), modular construction, 3D printing, and 'wearables' such as augmented reality glasses and exoskeletons are changing the way projects are monitored, constructed and operated.

Developments in the software used for planning, designing, executing and operating construction projects have been equally impressive. The use of this software has led to greater efficiency and precision in project execution and has facilitated collaboration amongst project participants. BIM (building information modeling) software - widely used in both Canada and the UK - is likely the best-known example of this. Through its data-driven approach to project design, management and delivery, the use of BIM has been shown to simplify the exchange of information and documentation among project participants, reduce costs and increase the chances that projects will be delivered on time and on budget.

BIM and the future of project collaboration

Construction projects are complicated and risky endeavors. They can be less so when parties involved in the project are well informed of one another's activities and where collaboration is fostered. Information management, transparency and trust among project participants are therefore keys to ensuring the success of a construction project. BIM can play an important role in this context.

A BIM model is intended to be far...