Once a draft contract has been created and approved by both parties (buyer and seller), it is deployed (published) to the selected blockchain network. The next step is to transfer (pay) the escrow payment (“Agreed amount” as in the contract) into the deployed contract to activate it.
This is done by the buyer and both a buyer and seller will see the transaction hash, its timestamp, and change in the contract status inside the escrow app. If necessary, you can check via the relevant blockchain explorer website by the contract address.
The seller sees the payment time-locked in the contract and starts working on the order. If fulfilled and approved by the buyer, the escrow payment will be released to the seller’s Metamask address by the buyer. But it can also be released by the seller if:
- Buyer protection time has passed.
- The buyer neither released nor disputed the contract.
This function is added to the contract code to protect not only a buyer from scams but the seller as well. Hypothetically, it is also useful if serious health or other issues prevent a buyer from releasing the payment to the seller. When payment is released to the seller, the contract moves to execute.
Have more questions on escrow disputes? Read here.