@@ -104,6 +104,8 @@ async def run_async(
       content = data_bytes.decode('utf-8', errors='replace')
     except FileNotFoundError:
       return {'status': 'error', 'error': f'File not found: {path}'}
+    except ValueError as e:
+      return {'status': 'error', 'error': str(e)}
 
     # Normalize line breaks in old_string to \n and use regex for flexible matching
     normalized_old = old_string.replace('\r\n', '\n')
 
@@ -148,3 +148,31 @@ async def test_edit_file_handles_special_regex_chars(
     assert result["status"] == "ok"
     data = await env.read_file("test.txt")
     assert data == b"replaced\nline2"
+
+  @pytest.mark.asyncio
+  async def test_edit_file_reports_path_escape_as_tool_error(
+      self, env: LocalEnvironment
+  ):
+    """A `..` path escaping the working dir returns an error, not a raise.
+
+    The environment resolver raises ValueError for such paths; ReadFile and
+    WriteFile already surface it to the model as a recoverable error dict.
+    """
+    # Arrange
+    tool = EditFileTool(env)
+    await env.write_file("inside.txt", "line1\nline2")
+
+    args = {
+        "path": "../outside.txt",
+        "old_string": "line1",
+        "new_string": "changed",
+    }
+
+    # Act
+    result = await tool.run_async(args=args, tool_context=None)
+
+    # Assert
+    assert result == {
+        "status": "error",
+        "error": "Path escapes working directory: ../outside.txt",
+    }