Relationship of the parties to the escrow agreement
Escrow is a special type of contractual relationship, a new stage in shaping the security of obligations of the parties and guaranteeing results. This construction is not a kind of bank account agreement, nor is it a settlement. This is a specific tool containing elements of several contracts at once. It takes into account the norms of storage, and forms of payment, widely accepted in most countries — for example, a collection of payment or letter of credit. Modern legislation takes into account all the shortcomings of modern transactions involving an escrow agent, providing for possible conflicts that had to be encountered earlier.
What is escrow and how does it work?
Like any financial and legal mechanism, an escrow agreement has both pros and cons, so it is important to know how it works if a practical need arises. And in modern conditions, escrow is becoming increasingly popular.
Responsibility and remuneration of an escrow agent
The question of the responsibility of an escrow agent arises at different stages of the transaction, but the most difficult in terms of significance and evaluation of its actions is the stage of checking the deposited property during the transfer to the beneficiary. Almost the whole part of the transaction depends on the competence and impartiality of the escrow agent, since the decision on the fulfillment of the conditions by the depositor is made by the escrow agent independently, although the contractual requirements are taken into account. But any contract leaves a field for interpretations.