Final answer:
In a dispute involving escrow, the neutral third party will hold the funds or valuables until the dispute is resolved or a legal ruling is made. The parties may need mediation, arbitration, or legal action to determine the outcome. Clear terms for the escrow arrangement are critical for preventing complications.
Step-by-step explanation:
In the event of a dispute before the escrow funds or valuables are disbursed, the neutral third party holding the escrow will typically not release those funds or valuables until the dispute has been resolved. This is because the escrow agent's role is to protect the interests of all parties involved and ensure that the terms of the escrow agreement are met before disbursing the funds.
If the parties involved cannot reach an agreement or resolve the dispute on their own, they may need to go through mediation, arbitration, or legal proceedings to determine how the escrow should be handled. The escrow agent will then follow the direction of the outcome of these proceedings, whether it means returning the funds to the depositor, disbursing them to the intended recipient, or some other resolution. It is extremely important for the terms and conditions of the escrow arrangement to be clearly defined from the start to prevent any misunderstandings or legal complications.