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escrow agreement

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Escrow is a legal arrangement whereby an asset (often money, but sometimes other property such as art, a deed of title, website, or software source code) is delivered to a third party (called an escrow agent) to be held in trust pending a contingency or the fulfillment of a condition or conditions in a contract. Upon that event occurring, the escrow agent will deliver the asset to the proper recipient, otherwise the escrow agent is bound by his or her fiduciary duty to maintain the escrow account.

While escrow is best known in the context of real estate (specifically in mortgages where the mortgage company will establish an escrow account to pay property tax and insurance), escrow companies are also commonly used in the transfer of higher value properties like websites and businesses and in relation to person to person auctions (eBay).

Real estate agents are in some jurisdictions considered to act as escrow agents when they accept deposits for the purchase of real property.

Software source code escrow agents hold source code in escrow in the event that the creator of the source code refuses or is unable to release the source code to the user of specialised software if that software no longer functions or in certain other events.

The word "escrow" is derived from the Middle English word "escrowl", meaning "scroll".

External links

• How to choose an escrow company
• FTC advice on phony escrow services

See also

• Key escrow
• Power of attorney
• Internet Escrow

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