A smart contract system for security of payment of construction contracts

Date

2020-12-01

Author

Ahmadisheykhsarmast, Salar
Sönmez, Rifat

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This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

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Timely payment of project participants is crucial for successful completion of construction projects, however the construction industry worldwide suffers from poor payment practices. The existing research studied the reasons and the consequences of the payment problem, but very few studies proposed methods for eliminating the problem. In this paper a novel smart contract payment security system named SMTSEC is presented for eliminating or reducing payment issues in the construction sector. The SMTSEC ensures security of payment of construction contracts through an automated computerized protocol that runs on a decentralized blockchain. The potential contributions and limitations of the proposed SMTSEC are studied through a real construction project. The main contribution of the SMTSEC is that it provides a new method for timely and transparent payment of construction projects by guaranteeing security of payment for works under construction without requiring administrative costs and burdens of trusted intermediaries such as lawyers or banks.

Subject Keywords

Control and Systems Engineering, Civil and Structural Engineering, Building and Construction

URI

https://hdl.handle.net/11511/56272

Journal

Automation in Construction

DOI

https://doi.org/10.1016/j.autcon.2020.103401

Collections

Department of Civil Engineering, Article

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Citation Formats

S. Ahmadisheykhsarmast and R. Sönmez, “A smart contract system for security of payment of construction contracts,” Automation in Construction, pp. 0–0, 2020, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/56272.