A smart contract is self executing contract where the terms and conditions are defined and enforced using software. Smart contracts are generally stored and secured using blockchain technology. The benefit of a smart contract is that technologies like blockchain and cryptography ensure the execution of a peer-to-peer contract without needing to involve lawyers and trust. smart contract is immutable and Distributed.
e.g Mr. John wants to start up a new project and ask for help and funds. he advertise it in the crypto world.He finds investors to help in the project with a contract to complete the task within a month. If John cannot complete the project in a month the money goes back to the investor directly without involving a third party.