escrow

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Escrow

Something of value, such as a deed, stock, money, or written instrument, that is put into the custody of a third person by its owner, a grantor, an obligor, or a promisor, to be retained until the occurrence of a contingency or performance of a condition.

An escrow also refers to a writing deposited with someone until the performance of an act or the occurrence of an event specified in that writing. The directions given to the person who accepts delivery of the document are called the escrow agreement and are binding between the person who promises and the person to whom the promise is made. The writing is held in escrow by a third person until the purpose of the underlying agreement is accomplished. When the condition specified in the escrow agreement is performed, the individual holding the writing gives it over to the party entitled to receive it. This is known as the second delivery.

Any written document that is executed in accordance with all requisite legal formalities may properly be deposited in escrow. Documents that can be put in escrow include a deed, a mortgage, a promise to pay money, a bond, a check, a license, a patent, or a contract for the sale of real property. The term escrow initially applied solely to the deposit of a formal instrument or document; however, it is popularly used to describe a deposit of money.

The escrow agreement is a contract. The parties to such an agreement determine when the agreement should be released prior to making the deposit. After the escrow agreement has been entered, the terms for holding and releasing the document or money cannot be altered in the absence of an agreement by all the parties.

A depositary is not a party to the escrow agreement, but rather a custodian of the deposit who has no right to alter the terms of the agreement or prevent the parties from altering them if they so agree. The only agreement that the depositary must make is to hold the deposit, subject to the terms and conditions of the agreement. Ordinarily, the depositary has no involvement with the underlying agreement; however, an interested party may, in a few states, be selected to be a depositary if all parties are in agreement. In all cases, a depositary is bound by the duty to act according to the trust placed in him or her. If the depositary makes a delivery to the wrong person or at the wrong time, he or she is liable to the depositor. The document or the money is only in escrow upon actual delivery to the depositary. Ordinarily, courts are strict in their requirement that the terms of the agreement be completely performed before the deposit is released. A reasonable amount of time must generally be allotted for performance. Parties may, however, make the agreement that time is of the essence, and in such a case, any delay beyond the period specified in the agreement makes the individual who is obligated to act forfeit all his or her rights in the property in escrow.

escrow

1) n. a form of account held by an "escrow agent" (an individual, escrow company or title company) into which is deposited the documents and funds in a transfer of real property, including the money, a mortgage or deed of trust, an existing promissory note secured by the real property, escrow "instructions" from both parties, an accounting of the funds, and other documents necessary to complete the transaction. When the funding is complete and the deed is clear, the escrow agent will then record the deed to the buyer and deliver funds to the seller. The escrow agent or officer is an independent holder and agent for both parties who receives a fee for his/her/its services. 2) n. originally escrow meant the deed held by the escrow agent. 3) n. colloquially, the escrow agent is called an "escrow," while actually the escrow is the account and not a person. 4) v. to place the documents and funds in an escrow account, as in: "we will escrow the deal." (See: escrow agent)

escrow

noun conditional deed held in trust, condiiional instrument, contingent deed held in trust, instrument held until the performance of a condition, written instrument of contingency
See also: binder

escrow

1 a deed delivered to a third party to hold until fulfilment of a condition, when it will be delivered; e.g. a conveyance executed by a vendor of property and delivered to his solicitor pending completion by the purchaser's paying the purchase price.
2 more generally a service which offers to hold something for a seller pending payment of the price.

ESCROW, conveyancing, contracts. A conditional delivery of a deed to a stranger, and not to the grantee himself, until certain conditions shall be performed, and then it is to be delivered to the grantee. Until the condition be performed and the deed delivered over, the estate does not pass, but remains in the grantor. 2 Johns. R. 248; Perk. 137, 138.
     2. Generally, an escrow takes effect from the second delivery, and is to be considered as the deed of the party from that time; but this general rule does not apply when justice requires a resort to fiction. The relation back to the first delivery, so as to give the deed effect from that time, is allowed in cases of necessity, to avoid injury to the operation of the deed, from events happening between the first and second delivery. For example, when a feme sole makes a deed and delivers it as an escrow, and then marries before the second delivery, the relation back to the time when she was sole, is necessary to render the deed valid. Vide 2 Bl. Com. 307; 2 Bouv. Inst. n. 2024; 4 Kent, Com. 446; Cruise, Dig. t. 32, c. 2, s. 87 to 91; Com. Dig. Fait, A 3; 13 Vin. Ab. 29; 5 Mass. R. 60; 2 Root, R. 81; 5 Conn. R. 113; 1 Conn. R. 375; 6 Paige's R. 314; 2 Mass. R. 452; 10 Wend. R. 310; 4 Green]. R. 20; 2 N. H. Rep. 71; 2 Watts', R. 359; 13 John. R. 285; 4 Day's R. 66; 9 Mass. R. 310 1 John. Cas. 81; 6 Wend. R. 666; 2 Wash. R. 58; 8 Mass. R. 238; 4 Watts, R. 180; 9 Mass. Rep. 310; 2 Johns. Rep. 258-9; 13 Johns. Rep. 285; Cox, Dig. tit, Escrow; Prest. Shep. Touch. 56, 57, 58; Shep. Prec. 54, 56; 1 Prest. Abst. 275; 3 Prest. Ab. 65; 3 Rep. 35; 5 Rep. 84.

References in periodicals archive ?
NCC Group currently protects over 9,000 business critical software applications under comprehensive escrow agreements, on the behalf of licensees worldwide.
The Home Loan court succinctly stated that to hold that the fiduciary duty of disclosure is limited to the terms of the escrow agreement, the special relationship of trust established at law when a fiduciary relationship is established would be disregarded.
In summary, we strongly recommend that you don't set up your escrow agreement with bankruptcy as the sole release condition.
79-91, an escrow agreement in which a seller has no right to or interest in the escrowed funds unless and until the buyer defaults on the installment obligation does not impose a substantial restriction.
The proceeds of the Term Loan were funded into a segregated escrow account (the "Escrow Account"), pursuant to the escrow agreement dated as of August 27, 2010 (the "Term Loan Escrow Agreement"), among Chemtura, the Administrative Agent and the Escrow Agent, together with a deposit by Chemtura of an additional amount sufficient to fund the interest expected to accrue on the Term Loan for the period from the August 27, 2010 to October 26, 2010, and the amount of the arrangers' fees and expenses.
If a technology licensee is concerned that the developer will for some reason in the future no longer provide support, the licensee should request that an escrow agreement be put into place.
But he added that just because the city has the power to change the parameters of the escrow agreement, that doesn't mean it will.
461(f)(2) requirement (dealing with the transfer of money or other property to provide for the satisfaction of an asserted liability), the court agreed with Varied that the escrow agreement did not need to be signed by the claimant to qualify under Sec.
The escrow agreement provides that the Intertainment shares will be released over a period of 24 months in eight equal instalments at the end of each calendar quarter following the closing date.