What Are the Limitations of Smart Contracts Compared to Traditional Legal Agreements?

Smart contracts have several limitations. They are rigid and cannot be easily amended once deployed, unlike traditional contracts which can be modified by mutual agreement.

They also struggle with ambiguity and subjective terms, as they can only execute on precisely defined, objective conditions. Furthermore, smart contracts are vulnerable to bugs and code exploits, which can lead to unintended consequences and financial loss.

They also face challenges in handling real-world events that are not easily quantifiable or verifiable by an oracle, limiting their scope of application.