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Property or money held by a third party until the agreed upon obligations of a contract are met.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


A certificate stating that an asset is being held by a third party on behalf of two parties to a transaction until certain conditions are filled. An escrow agreement is issued by the bank or other institution holding the asset in escrow and is useful to prove to one party or the other that the escrow has in fact taken place. See also: Escrow agent.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


The holding of assets (that is, securities) by a third party.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


When someone else holds assets of yours until the terms of a contract or an agreement are fulfilled, your assets are said to be held in escrow. The assets could be money, securities, real estate, or a deed.

The person or organization that holds the assets is the escrow agent, and the account in which they are held is an escrow account.

For example, if you make a down payment on a home, the money is held in escrow until the sale is completed or the deal falls through.

Amounts you prepay to cover property taxes and insurance premiums as part of your regular mortgage payment are also held in escrow until those bills come due and are paid. In that case, you may earn interest on the amount in the escrow account.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.


The process in which money and/or documents are held in trust by a disinterested third party who will consummate the instructions of the parties as expressed in their contracts.The third party is called the escrow agent.The escrow agreement usually contains a clause providing that if the parties disagree about something and are unable to resolve their differences, the escrow company will pay all money on hand into court in an action called an interpleader,name the disputing parties as defendants,disclaim any interest of its own in the property except for reimbursement for costs and expenses of bringing the interpleader action, and then let the parties battle it out in court. This effectively takes the escrow company out of the middle of any disputes and avoids liability on its part.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
Under the terms of eXact learning solutions' escrow agreement, the company supplies NCC Group with a copy of the source code for their customers' applications.
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.
Finally, if an escrow agreement is established by a seller after a buyer has made available the full amount of the purchase price, regardless of the terms of the escrow (i.e., a self-imposed limit), the constructive receipt doctrine will apply.
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.
It is up to the contract negotiators to determine the level of protection required and to make sure the escrow agreement is crafted to their specifications.
Escrow agreements usually supplement some primary agreement, such as maintenance, consulting, basic ordering, or others.
If you are looking to add escrow agreements to your acquisition tool bag, then e-Contracts may be worth a look.
It is important to note that alternative courses to escrow agreements do exist.
Software escrow has become so popular over the last two decades that many clients require an executed escrow agreement before signing a software license.