The use of blockchain-based smart contracts in procurement is an emerging research area with potentially significant implications in both practical and scientific terms. The new technology seems to have the potential to alter the way cross-company procurement processes are designed and executed. In theory, the blockchain can enable a pure peer-to-peer network without the need for third parties, while smart contracts can automatically execute predefined actions based on contractual clauses. That could increase the trustworthiness between supply chain partners and provide secure and traceable audit trails of all transactions. However, these potential benefits face a variety of challenges. These include, in particular, technological shortcomings, legal issues, and functional requirements. This paper analyzes the current state of the art of smart contracts in the context of procurement based on a systematic literature review and evaluates the technology’s maturity using the Technology Readiness Level model. For this purpose, critical characteristics, application areas, as well as technological, legal, and functional aspects of smart contracts, are examined. In this way, this paper lays a foundation for future research, provides valuable insight for procurement practitioners, and offers approaches for the further development of smart contracts.