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A Smart Contract is a self-executing digital agreement that automatically performs actions when specific conditions are met. Unlike traditional contracts, these computer programs run on blockchain technology, making them tamper-proof and transparent. In Switzerland, Smart Contracts enjoy legal recognition under the DLT Act, giving them similar status to standard written agreements.

Smart Contracts handle tasks like transferring digital assets, managing supply chains, or processing insurance claims without human intervention. Swiss businesses increasingly use them to automate routine transactions, reduce costs, and eliminate intermediaries. While they can't replace all traditional contracts, they excel at executing straightforward, repeatable agreements where the terms can be coded into clear if-then statements.

Smart Contracts work best when you need to automate recurring transactions with clear, measurable conditions. They're ideal for Swiss businesses handling frequent cryptocurrency transfers, managing supply chain deliveries, or processing automated insurance payouts. The key is having events that can be digitally verified - like receipt confirmations, price triggers, or completion dates.

These digital agreements particularly shine in regulated industries where transparency and immutability matter. Swiss banks use them for automated compliance checks, while trading platforms deploy them for instant settlement of digital asset trades. They're also valuable when dealing with international partners, as they eliminate the need for traditional intermediaries and reduce cross-border complexity.

• Basic Transaction Smart Contracts: Handle simple, automated exchanges of digital assets or cryptocurrency on Swiss platforms
• Conditional Payment Smart Contracts: Release funds automatically when predefined conditions are met, popular in Swiss trade finance
• Supply Chain Smart Contracts: Track and verify product movements, automatically triggering payments upon delivery confirmation
• DeFi Smart Contracts: Power decentralized finance applications, handling lending, borrowing, and automated market making
• Regulatory Compliance Smart Contracts: Automate KYC checks and reporting requirements under Swiss financial regulations

• Blockchain Developers: Write and deploy the Smart Contract code, ensuring security and functionality on Swiss blockchain platforms
• Financial Institutions: Use Smart Contracts for automated trading, settlements, and compliance processes in Swiss banking
• Corporate Legal Teams: Review and approve Smart Contract logic, ensuring alignment with Swiss legal requirements
• Supply Chain Companies: Implement Smart Contracts for automated payments and delivery verification across borders
• Insurance Providers: Deploy Smart Contracts for automated claims processing and policy management
• Regulatory Bodies: Monitor Smart Contract implementations for compliance with Swiss financial regulations

• Define Trigger Events: Identify specific, measurable conditions that will activate the Smart Contract's actions
• Map Data Sources: List trusted external data feeds (oracles) needed to verify contract conditions
• Outline Actions: Specify exact outcomes, including payment amounts, asset transfers, or process changes
• Security Requirements: Document access controls and authentication methods following Swiss cybersecurity standards
• Test Parameters: Create test scenarios to verify contract behavior before deployment
• Compliance Check: Ensure alignment with Swiss DLT Act and relevant financial regulations
• Documentation: Prepare clear explanations of contract logic for all stakeholders

• Contract Logic: Clear definition of triggering conditions and resulting actions in machine-readable code
• Party Identification: Digital wallet addresses and legal identity verification of all participants
• Data Privacy Terms: Compliance statements addressing Swiss data protection requirements
• Execution Parameters: Specific blockchain network and technical requirements for operation
• Dispute Resolution: Protocol for handling technical failures or unexpected outcomes
• Regulatory Compliance: References to relevant DLT Act provisions and financial regulations
• Termination Conditions: Clear criteria for contract completion or early termination

Smart Contracts differ significantly from traditional Contractual Agreements in their execution and enforcement mechanisms. While both create binding obligations between parties, Smart Contracts operate through automated, blockchain-based code rather than relying on human interpretation and manual enforcement.

• Execution Method: Smart Contracts automatically execute when conditions are met, while Contractual Agreements require manual enforcement and oversight
• Modification Process: Smart Contracts cannot be easily modified once deployed, whereas Contractual Agreements can be amended through mutual agreement
• Intermediary Role: Smart Contracts eliminate the need for intermediaries, while Contractual Agreements often require third parties for verification and enforcement
• Error Handling: Smart Contracts follow strict code logic with limited flexibility for unexpected situations, but Contractual Agreements allow for human interpretation of unforeseen circumstances
• Cost Structure: Smart Contracts have higher upfront development costs but lower ongoing administrative expenses compared to traditional agreements