A smart contract automates legal agreements by executing code when predefined conditions are met, leveraging blockchain technology for transparency and security. Unlike traditional contracts, which require intermediaries, smart contracts self-execute, ensuring efficiency and reducing costs. For instance, in real estate transactions, a smart contract can automatically transfer ownership once payment is made and verified. This automation minimizes human errors and disputes, while fostering trust among parties involved. As smart contracts evolve, they hold potential for various sectors, including finance, supply chain, and insurance.