SMART CONTRACTS IN INDIA: LEGAL RECOGNITION, COMMERCIAL APPLICATIONS AND EMERGING CHALLENGES

Smart contracts have moved from a theoretical blockchain application to a genuine feature of Indian commercial practice, automating everything from loan disbursement to insurance claims and supply chain payments. Yet Indian law has no dedicated statute addressing them. This piece examines how existing legislation Section 10 of the Indian Contract Act, 1872 and Section 10A of the Information Technology Act, 2000 extends to self-executing agreements by focusing on the essential elements of a valid contract rather than the medium through which it is formed, a position the Supreme Court affirmed in Trimex International FZE Ltd. v. Vedanta Aluminium Ltd. It argues that while this general framework is sufficient to recognise smart contracts as legally enforceable, it leaves several practical questions unresolved: how liability is allocated when a contract executes automatically on a coding error, how cross-border disputes involving blockchain recorded agreements are to be adjudicated, and how consumers are protected once human intervention is removed from performance. The piece concludes that India does not need an entirely new statute to accommodate smart contracts, but would benefit from targeted regulatory clarification and more consistent judicial guidance on these specific points of uncertainty.