When escrow is useful
Escrow is useful when money must move before all approvals are received, or when documents should be held until registration, tax or commercial milestones are complete.
Clear escrow instructions
The escrow terms should define the escrow holder, what is held, when it is released, what happens in a dispute and how party instructions are documented.
Disputes over funds
A good escrow mechanism avoids a situation where funds are released before the parties can resolve a problem. It creates space for legal resolution or mediation.
Frequently Asked Questions
Can any lawyer hold escrow?
The escrow holder should understand the transaction, professional duties and the exact release conditions.
Does escrow replace a full agreement?
No. Escrow is part of the transaction structure and should sit within a clear agreement.