Legal Challenges of Automating Construction Contracts Through the Use of Blockchain and Artificial Intelligence Technologies: A Comparative Perspective on International Legal Systems

Abstract

Using a descriptive-analytical method, this study examines the legal and operational challenges associated with the automation of smart construction contracts based on blockchain and artificial intelligence technologies and proposes solutions for compatibility with international legal systems. Smart contracts, through the automated execution of obligations, and artificial intelligence, through the capability to analyze complex data, predict risks, and automatically draft contracts, possess significant transformative potential for the construction industry. Nevertheless, legal obstacles such as ambiguity regarding the legal validity of contracts, the complexity of determining the governing law and judicial jurisdiction, violations of privacy in public blockchains, liability arising from coding errors, and algorithmic biases have limited the adoption of these technologies. The findings indicate that in Iran, the absence of specific legal frameworks, inadequate technical infrastructure, and a lack of specialized training constitute the principal barriers, whereas leading jurisdictions such as Singapore and Switzerland have achieved greater success through supportive legislation, private blockchain systems, and extensive educational initiatives. The study suggests that the adoption of laws compatible with both Sharia principles and international standards, the use of private blockchains to preserve privacy, the development of explainable artificial intelligence to reduce algorithmic bias, and the establishment of digital arbitration platforms can accelerate the adoption of these technologies in Iran. A comparative analysis between Iran and leading legal systems highlights the necessity of legal reform, investment in digital infrastructure, and the strengthening of educational capacities. Drawing upon authoritative Iranian and international sources, this research provides a comprehensive framework for the utilization of smart contracts in the construction sector and emphasizes the need for cooperation among governments, industry actors, and academic institutions.