Parties and Arbiter

The three roles in a Pacta agreement

The Three Roles

Every Pacta agreement has three address slots:

Role	Who they are	What they can do
Party A	First party — usually the initiator	Deposit, approve, cancel, raise dispute
Party B	Second party — counterparty	Deposit, approve, cancel, raise dispute
Arbiter	Neutral third party	Resolve disputes, split funds, assign assets

Party A

Party A is always the address that creates the agreement. They are the initiator.

When you call createAgreement(), the partyA field should be your own address. Party A can:

• Deposit funds into the agreement
• Call approve() to signal they are satisfied
• Cancel the agreement before party B deposits
• Raise a dispute if party B fails to deliver
• Signal consent to a mutual cancel

Party B

Party B is the counterparty. They can be set at creation time or updated later (before they deposit) using setPartyB().

Allowing setPartyB() before deposit is useful when the counterparty is not known at creation time — for example, a marketplace listing where any buyer can fill the order.

Party B can do everything Party A can do, except cancel in the Created state (only the creator can cancel before both parties are active).

Arbiter

The arbiter is optional. If you pass 0x0 as the arbiter address, no arbiter is assigned and disputes cannot be raised.

The arbiter cannot:

• Deposit or approve on behalf of a party
• Trigger settlement
• Cancel the agreement unilaterally

The arbiter can only act when a dispute has been raised. Once in Disputed state, the arbiter can:

• Rule in favour of party A or party B
• Split a coin balance between both parties
• Assign an object to a specific party
• Conclude the dispute (no winner, parties claim what they deposited)

Who Should Be the Arbiter?

This is an application-level decision. Common choices:

Use case	Arbiter choice
Freelance platform	The platform itself (your app’s wallet)
OTC desk	A trusted neutral third party
DAO service agreement	A DAO multisig
Automated deal	0x0 — no arbiter, disputes not allowed

Recipient Addresses

By default, funds go back to the depositing party on settlement. Party A’s funds go to party A. Party B’s funds go to party B.

Your app can override this at the protocol level by calling extract_coin_balance() with custom recipient logic — but this is an advanced composability pattern for protocols building on top of Pacta.

In Code

await pacta.createAgreement(signer, {
  partyA:  signer.address,        // you
  partyB:  "0xCOUNTERPARTY...",  // the other side
  arbiter: "0xARBITER...",        // dispute resolver, or "0x0" for none

  releaseConditions: ConditionPreset.FullConsent,
  termsHash:         "0xHASH...",
  expiryMs:          0n,
  unlockTimeMs:      0n,
})

Updating Party B Before Deposit

// Change party B before they have deposited
await pacta.setPartyB(signer, {
  agreementId: "0xAGREEMENT_ID...",
  newPartyB:   "0xNEW_PARTY_B...",
})

Once party B deposits, their address is locked. You cannot change party B after a deposit.