A smart contract in relation to blockchain technology refers to self-executing contracts with the terms written directly into code. These agreements automatically enforce and execute when predefined conditions are met, eliminating the need for intermediaries. Smart contracts enhance trust and reduce transaction costs by ensuring transparency and accuracy in execution. They are pivotal in decentralized applications, facilitating various use cases such as financial transactions, supply chain management, and legal agreements. Their immutable nature ensures that once deployed, the contract's terms cannot be altered unilaterally.