Applying blockchain technology in smart contracts for construction payment: a comprehensive solution for lumpsum contracts

Abstract

In the construction industry, delays caused by slow payment or payment disputes between investors and contractors pose significant challenges and create stressful situations. Despite efforts to minimize delays resulting from late payments, a fully optimized approach to address this issue has not been established thus far. This research proposes a novel solution by leveraging Smart Contracts in Blockchain technology to effectively handle delayed and disputed construction cost payments in accordance with contractual agreements. The objective is to mitigate the risks associated with project delays or extensions while ensuring the continuity and protection of the rights of all involved parties. By harnessing the blockchain capabilities of this technology, all project transactions are securely stored and tracked throughout the entire project timeline, from initiation to completion. Through the implementation of this approach, a reliable and transparent system is established to manage contractual relationships and resolve payment-related issues in the construction industry. In conclusion, the integration of Smart Contracts and Blockchain technology presents a promising solution for addressing the challenges associated with payment delays and disputes in construction projects.