Smart Contracts

How Does A Smart Contract Work?

3 years ago

A smart contract is a few lines of computer code that executes an agreement automatically according to the terms and conditions. The contract sits on a blockchain, making the process both transparent and secure. Each party has to fulfill obligations for the contract to execute: be that payment, processing a refund, or the delivery of services.

A smart contract is managed via a decentralized service. Meaning there’s no need for a lawyer, a bank, or any third-party, making the technology efficient, quick, and secure.

The precise way of working depends on the industry.

How Does A Yacht Charter Smart Contract Work?

Elitium is creating a bespoke smart contract for yacht charters.

Here, the smart contract handles the interactions between the charterer, the owner, and the broker. The full process looks something like the below:

  1. Create the contract: Elitium creates a contract on the blockchain, mirroring the terms of industry-standard yacht charter contracts
  2. Customize the terms: the contracts for each yacht charter is updated to reflect unique, yacht-specific terms
  3. Tweak the charter conditions: owners can adapt the contract for special conditions relating to the charter in question
  4. Contract signed: the client, owner, broker, and key stakeholders sign the smart contract
  5. Transfer funds: clients pay funds due to an Escrow account as per the terms and schedule of the contract
  6. Funds disbursed: funds are then automatically disbursed to the parties from the Escrow account

Charter a yacht on the blockchain today: use an Elitium smart contract.