I would like to know if the following scenario involving three parties could make sense in the context of a smart contract.

I am new to blockchain and smart contracts, I have come across some standard two party contracts and one-to-many like crowd funding but I could not find any mention of a three party contract along the following lines:

Let's say Alice and Bob share a boundary between their gardens and Bob is responsible for paying for a fence and Alice has some requirements.

So Bob cannot put up the fence unless Alice says the conditions are met.

Bob is also at the mercy of the weather and his workman, and the workman is at the mercy of the weather and issues on other jobs.

So in one sense: Bob has agreement (a) with the workman, John and a separate agreement (b) with Alice.

However, there could be an interesting interdependency created by Alice's requirements. She has the option of setting a requirement with a twenty four hours notice or no notice required. However, since she wants a fence up as soon as possible, if she drops the the 24H notice requirement then John has a option to come at an earlier date if he is stalled on his other job.

With two separate contracts the 24 hour notice/ no notice option could accidentally be different.

I don't know if this is a good example, but I am trying to understand if a single smart contract is ever used in order to hold three parties into an agreement, or should interdependent agreements like this be split into multiple two party contracts?

Or can a parent contract hold two child contracts with an interdependency?

Thanks in advance Brian

  • The mediator is a good example of a three party contract. Is there a white paper or explanation giving more detail of scenarios when it would be more effective or less effective. For example, are we talking about resolving non-smart-contract disputes via a mediator using a smart contract to manage the distribution of funds after a decision? Should a mediator have some qualifications, experience and reputation? Can a mediator be a group using voting to make majority verdicts?
    – Ancientone
    May 14, 2021 at 8:04

1 Answer 1


Your example is interesting and could be really meaningful if real world data (e.g. weather data) can be included.

Here's a simpler example that I can think of based on your example.

Let's say John put up the fence as Bob instructed, but there is misalignment between Bob's instructions and Alice's requirements. Now Alice is thinking about suing Bob, because in her view, Bob acted against her will. But Alice also does not like the courts. But she heard about this dispute resolution DApp on Cardano (to be build) where an independent third party helps the disputants solve their dispute.

This third party can be a mediator that simply helps the parties find a mutually agreeable solution. The payment of said mediator can be in the form of a smart contract. Alice opens a case and initiates the payment of the mediator for her share (usually mediators and arbitrators get paid an equal amount by both parties). This amount is now in escrow and will only be dispersed if the other party (Bob) agrees to mediate this case as well (by paying the mediation fee).

Instead of having two contracts (one between the mediator and Alice, the other one between the mediator and Bob), both transfers can be rolled up into one smart contract.

Of course, there are many more interesting examples, but I hope this example helps. Btw, I will be proposing a dispute resolution marketplace in an upcoming Project Catalyst fund, so keep an eye out for that. There's a lot of little disagreements between neighbors (as you indicated) where smart contracts has the potential of making life a little bit nicer for communities of varying shapes.

  • The mediator is a good example of a three party contract.
    – Ancientone
    May 14, 2021 at 7:51

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