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Towards Adoption of Smart Contract in Construction Industry in Malaysia

Dewi Noorain Bolhassan, Chai Changsaar, Ali Raza Khoso, Loo Siawchuing, Jibril Adewale Bamgbade and Wong Ngie Hing

Pertanika Journal of Science & Technology, Pre-Press

DOI: https://doi.org/10.47836/pjst.30.1.08

Keywords: Adoption, construction industry, Malaysia, qualitative research, smart contracts

Published: 2021-11-24

The revolution of Malaysian Construction 4.0 through emerging technologies has brought a paradigm shift that has digitalized the construction sector. There is a need to adopt a computerized protocol to assist in automating the performance of a contract to meet future digital challenges. Therefore, this paper aims to serve as a pioneer study to investigate the implementation of the Malaysian construction industry to adopt smart contracts. This study adopted a qualitative scientific methodology, whereby a systematic review was conducted to gather the benefits and challenges of implementing smart contracts in the construction industry. Further, interview sessions were arranged to collect data from the construction contract management experts. The research findings unveil that due to the self-executing attribute of smart contracts, the implementation of smart contracts could provide a better apportionment of risks in a contract. The study also finds that the challenges in implementing smart contracts are severe. For instance, the smart contract is irreversible and immutable and prone to human error. The study concludes that it is more suitable to apply and implement a smart contract to a short-term contract that is not subjected to variation. Furthermore, a smart contract can enhance the efficiency in managing the contracts, such as reducing time and managing the conflicts and disputes that arise during the contract duration. The developed implementation framework is significant for the construction personnel, especially those dealing with the contract administration. The implementation of smart contracts in construction could boost contract administration and management discipline via investment in this new technology.

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ISSN 0128-7702

e-ISSN 2231-8534

Article ID

JST-2927-2021

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