Have you heard about the escrow contract before? You might not be familiar with this kind of deal. It is a legal concept that refers to an agreement in which a third business (the escrow agent) partner holds a financial instrument or company’s asset of the contracting partners, which is still under the pending transaction. Want to know more about escrow agreement templates? Check this out below!
What Is Escrow Contract?
The escrow agreement templates define an agreement between business partners in which one partner deposits a financial term or asset with a third business partner. This third business partner must deliver the asset to the second business partner when the deal terms and conditions are met. The term escrow usually applies to the deposit of a document, but these days, this condition and term often explained a money deposit. Anything which has value can get in an escrow, including the following:
- Written instrument
- Promise to pay
The escrow agreement templates explain the directions given to the business partner who receives the delivery of the documents or materials. The binding contract between business partners who make the promise and person to whom the guarantee is made. Escrow contract usually gives the outline of the terms and conditions between involved business partners. The agreement is generally between three business partners:
- Agent of escrow
The agent has a function to keep the financial term or company asset and to deliver it to the recipient in a business relationship. The agent will do the task if the conditions and business terms outlined in the paper are met. Escrow agreement sample usually includes the following data:
- Identity the details information about the appointed agent
- Definitions for essential points in the contract
- Funds of escrow in a business relationship
- Conditions and terms for release of the funds
- The agent ‘s acceptable use of the funds
- The agent ‘s liabilities and obligations
- The agent ‘s fees and expenses
- Venue and jurisdiction
Who Uses Escrow Agreements?
In the security or protection industry, the escrow contract is used to deliver stock when they are granted under stock option plans. Real estate companies also use escrow agreement format
In their business. Escrow contract help to make sure that both business partners hold up their end of the agreement clearly and smoothly. There are three typically acts as escrow agents in real estate agreements:
- Title agents
Practical Ways to Make Your Escrow Agreement Effective
- Do research. In drafting agreements, research help to get the information about escrow agreement templates and business partners that you are working with. For legal practitioners, research helps you to enrich expertise and knowledge.
- Check if you have already provided complete the deposit contents.
- Adopt consistently and established escrow policies to help you run the business smoothly.
An escrow contract is vital in a business partnership to discuss clearly and smoothly the asset of the company in the third party during the work period. When it comes to constructing an escrow contract for your company, the escrow agreement templates are what you need for. The models are available with many formats such as PDF, MS Word, Google Sheet, and Google Docs.
Escrow Agreement Templates Sample