What is Escrow Smart Contract?

Escrow is the third party that holds the asset(asset can be money, bond, or stocks) in the presence of two parties. Escrow will release the fund when certain conditions are met.

For Example: “A” is a seller and wants to sell his car, and “B” is a buyer who wants to buy “A”‘s car so they will contact Escrow “C”(an arbiter) which holds the asset until “B” receives the car. When this condition will be met, Escrow will release the fund to “A”. This solves the issue of trust and prevents any discrepancy.

Let us write a smart contract for the Escrow using solidity language. 

Example: In the below example the third party will hold the asset, which will be released on when conditions are fulfilled.

Solidity

// SPDX-License-Identifier: GPL-3.0
pragma solidity >=0.4.22 <0.9.0;
/// @title A contract for demonstrate Escrow Smart Contract
/// @author Jitendra Kumar
/// @notice For now, this contract just show how to third party manages the assets of buyer and seller
contract escrow{

    // Declaring the state variables
    address payable public buyer;
    address payable public seller;
    address payable public arbiter;

    // Defining a enumerator 'State'
    enum State{

        // Following are the data members
        awate_payment, awate_delivery, complete
    }

    // Declaring the object of the enumerator
    State public state;

    // Defining function modifier 'instate'
    modifier instate(State expected_state){

        require(state == expected_state);
        _;
    }

    // Defining function modifier 'onlyBuyer'
    modifier onlyBuyer(){
        require(msg.sender == buyer ||
                msg.sender == arbiter);
        _;
    }

    // Defining function modifier 'onlySeller'
    modifier onlySeller(){
        require(msg.sender == seller);
        _;
    }

    // Defining a constructor
    constructor(address payable _buyer,
                address payable _sender){

        // Assigning the values of the
        // state variables
        arbiter = payable(msg.sender);
        buyer = _buyer;
        seller = _sender;
        state = State.awate_payment;
    }

    // Defining function to confirm payment
    function confirm_payment() onlyBuyer instate(
        State.awate_payment) public payable{
        state = State.awate_delivery;
    }

    // Defining function to confirm delivery
    function confirm_Delivery() onlyBuyer instate(
        State.awate_delivery) public{
        seller.transfer(address(this).balance);
        state = State.complete;
    }

    // Defining function to return payment
    function ReturnPayment() onlySeller instate(
        State.awate_delivery)public{
        buyer.transfer(address(this).balance);
    }
}

Output :  

Remix Output