Smart Contracts vs. Traditional Contracts: What Law Students Must Know

In the rapidly evolving legal landscape, the emergence of smart contracts marks a transformative shift from conventional paper-based agreements. At institutions like the Presidency School of Law (PSOL), Presidency University, there is a growing emphasis on equipping law students to understand not just the technological aspects of smart contracts, but also their complex legal implications. 

 

Traditional contracts are legally binding agreements drafted in natural language, enforced by law through courts. They require negotiation, manual execution, and are often time-consuming and costly due to the involvement of human intervention. Their interpretation also depends on judicial discretion, which can lead to ambiguity or delay. 

 

In contrast, Smart contracts are self-executing digital agreements written in code, operating on blockchain platforms. These contracts automatically enforce obligations when predefined conditions are met, reducing the need for intermediaries. For example, a smart contract in a supply chain can release payment instantly upon delivery verification, eliminating disputes or delays. 

 

However, smart contracts present new challenges. Since they are code-based, legal interpretation becomes complex—can code reflect intent? Also, issues like jurisdiction, enforceability, data privacy, and modification post-execution remain contentious. Moreover, they lack flexibility in unforeseen scenarios—a key feature of traditional contracts. 

 

For law students, understanding both is crucial. While traditional contracts emphasize legal reasoning and dispute resolution, smart contracts call for tech literacy, interdisciplinary skills, and adaptability to emerging legal frameworks. 

 

In conclusion, rather than viewing smart contracts as a replacement, law students should see them as a complementary tool. The lawyer of tomorrow—shaped at forward-thinking institutions like Presidency School of Law—must be capable of navigating both traditional and tech-driven legal systems. This dual expertise not only strengthens legal practice but ensures long-term relevance in an increasingly digital legal ecosystem. 

 

 

Written by:  

Ms. Komal Agrawal 

Assistant Professor,  

Presidency School of Law