Usage Scenario:
A Buying Contract that Utilizes Escrow

Author(s): Michael Kifer

URL(s) or other references: None so far

Domain: Contracting and negotiation


A buyer wants to buy something from an on-line store. This service involves two other independent services, a delivery service and a financing service. Due to the high stakes involved (e.g., it is a Rolls-Royce purchase), the deal involves an escrow account where the buyer deposits some amount of $$.


The buyer and the seller (represented by the broker) have conflicting interests in the deal. They do not trust each other completely. The seller does not know if the buyer is serious. The buyer does not want to loose 100K in an on-line deal. Other services involved here, such as delivery and financing are unpredictable. The former may loose the Rolls-Royce and the latter may not approve the loan.

Actors & Goals

This can be made more complex by adding an escrow broker, an insurance service, and the like.

Stakeholders & Interests

Buyer wants to get the good or, at least, not loose money due to lost goods. Seller wants to sell goods and wants protection from buyers who are not serious. This is why escrow is required.

Modification History

Use Case: A Simple Contract


Same as for the overall scenario.


Both the customer and seller should be able to analyze the contract and determine if they can achieve their goals.


Same as before.


Buyer wants to buy; Seller wants to sell; nobody wants to loose. Both must understand the logic in which the contract is expressed and need to specify their particular requirements in that logic.




The contract tells what the buyer must do, what the seller must do, etc. Each actor has several options, which it can exercise. Therefore, the whole scenario has a game-theoretic flavor.

The contract (or, rather, the offer that Seller gives) is described from Buyer's point of view in terms of which actions Buyer can control and which are beyond his control.

Buyer might want to do some reasoning about the contract. For instance, he may propose a constraint, such as

This is not explicitly covered by the contract, so one question is whether there always is an execution of the contract (regardless of what the financing or the delivery services do) such that it satisfies the above constraint.

Ontologies and Semantic Descriptions

Some domain-specific ontology that describes the meaning of payments, escrows, etc.

Reasoning Techniques Required

Requires a logic that supports rules, process modeling, and game-like situations described here. The first two requirements are met by Concurrent Transaction Logic (CTR). The latter is supported by an extension to CTR, Concurrent Transaction Logic for Services (CTR-S), which we are currently working on.