Procurement as a logistics core function has prompted growing interest in smart contracts as an innovative solution to address the limitations of conventional contracts. This chapter explores smart contracts. It begins with smart contract definition and the conceptual shift they represent from traditional, paper-based contracts, and delves into the operational advantages of smart contracts, including automation, real-time execution, enhanced trust, and reduced administrative overhead. Next it acknowledges smart contract challenges, including technical immaturity, legal ambiguity, and interoperability issues. It further examines the mechanisms that underpin smart contracts, highlighting key components such as decentralized execution, oracles, and immutability. Technical aspects are analyzed through the lens of implementation feasibility and scalability, with a focus on the programming languages and platforms used in smart contract development. The chapter ends by considering legal regulatory and compliance issues in smart contracts.