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Escrow

There are cases where two parties who do not have ultimate trust in each other would like to engage in a transaction that requires disbursements of assets when certain conditions are met. In such a case, it is possible to use a service called Escrow provided by a trusted third party. The Escrow provider collects assets from one or both parties before the conditions are met, and disburses them as appropriate after they are met.

Incentives

Reasons for trusting a given escrow service may include their reputation. However, in a scenario where the transaction and escrow service are under the traditional legal system (as opposed to, say, a darknet market), the potential recourse of suing the escrow company if something were to go wrong is likely a factor.

Results

Using an escrow service to manage assets in the agreement is a way of ensuring, with higher certainty than otherwise, that both sides of an agreement are met.

Sources

References

Investopedia article on escrow.

Other Resources

Wikipedia article on Escrow