The smart contract is an “intelligent contract” generated by an automated computer program. This computer protocol automates an action when prerequisite conditions are met.
The objective of the smart contract is to make it possible to carry out all types of transactions, mostly financial (not exclusively).
The concept of the smart contract derives from blockchain; smart contracts are already present in both blockchain and cryptocurrency. These autonomous programs make cryptocurrency transactions possible within a blockchain.
In practice, a smart contract automatically executes predefined conditions written in a blockchain. Only the computer code can decide whether a contract has been fully or partially executed, making these protocols “smart”.
All the functions of a smart contract are carried out by a computer. When the pre-established conditions are met, a contract will come be established and each contractor will be a debtor to his obligations.
Unlike its traditional paper counterpart, the smart contract not only defines the rules of an agreement between several parties, but it also fixes the rules of the agreement in the blockchain, ensuring the transfer of an asset when the contractual conditions are met. The entire contracting process is therefore automated, from the drafting to the termination of the contract, ensuring the process is certified.
More detail: https://yousign.com/blog/smart-contract