Smart contracts are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. They are executed automatically when certain conditions are met. In a blockchain network, smart contracts are implemented using code on the blockchain. They can be used to automate a wide range of processes, such as supply chain management, insurance, and financial transactions. When a triggering event occurs, the smart contract is automatically executed, and the terms of the contract are enforced by the network.