A smart contract is a two-person arrangement in computer code format. They are running on the blockchain, so they are stored in a public database, and can not be changed.
The transactions that occur in blockchain-processed smart contract solutions, meaning they can automatically be submitted without a third party. It means that there’s no need to count on anyone!
The transactions only occur when the terms of the agreement are met — there is no third party, so there are no confidence issues.