Relationship of the parties to the escrow agreement

According to the escrow agreement, the participation of three parties is stipulated. It is a depositor, a beneficiary and an escrow agent. Both legal and physical persons can be in the role of the depositor and the beneficiary. Their status is not limited by law, so this scheme is not only entrepreneurial.

The role of the escrow agent is very important. He is the guarantor of the transaction. The law also does not limit his official status. Banks and notaries can perform this role. For notaries, this type of activity is not completely new. Earlier, notaries took cash and securities on deposit to later transfer to the creditor.

For credit institutions (banks), this service is becoming more and more popular, albeit a newer one. As escrow agents, banks and notaries are more credible but they charge more for their services than just an “intermediary”, as it is the price of security guarantees. This function is often performed by lawyers and licensed specialized commercial structures.

So, according to the law, an escrow agent is any third party competent, legally capable, independent, acting as an intermediary between the depositor and the beneficiary. He must verify the correctness of the fulfillment of the transaction terms by both parties, and only then transfer the funds (property) entrusted to him to the beneficiary.

When making bilateral deals, which is common in civil law relations, a mutual escrow is legally stipulated, in other words, two parties to the contract appeal to an escrow agent at the same time. That is, each side acts simultaneously as a depositor and as a beneficiary. Such a construction is often used if the contract was concluded, but the parties did not fulfill it or the trust between them was not complete due to some circumstances. To guarantee the fulfillment of the contract, the parties turn to the services of an escrow agent. He acts as a kind of "arbitrator" in such complex transactions. But mutual escrow is not necessarily used only in conflict situations, it can be an ordinary bilateral transaction.

 The trust has granted me an opportunity to sleep safe and calm

The word ‘trust’ means ‘confidence’. What is the difference between the notions of ‘belief’ and ‘confidence’? A person can believe blindly, but confidence is a belief supported by actions and deeds. At first glance, a trust is very similar to a normal contract of assignment: one person authorizes another to manage his/ her property in one way or another. However, the similarity is purely external. The peculiarity of the trust is that the thing that is transferred to the management, irrevocably becomes the property of the manager. I can give an example of the situation where the trust is used. An old millionaire retires because he is no longer able to manage his entire fortune. He wants his sons to continue his work, but he does not want to simply give his sons large sums of money, apprehending that young people could squander them. Thus, our millionaire finds a reliable lawyer and concludes a trust agreement with him. Under this contract, the lawyer receives the state of a millionaire (trust founder) in his management. The lawyer undertakes to manage the fortune only and exclusively in the interests of the sons of a millionaire. He (the lawyer) has to finance their education, cover their expenses to set up their own business, etc. At the same time, the trust contract strictly prohibits the lawyer to pay from the allocated fortune for the expenses that would be unreasonable use of money in the opinion of the father (bets on races, excessive restaurant expenses, etc.). The founder of the trust may appoint a fixed annual rewarding for the performed work to the lawyer (Trustee) himself from the amount of the transferred property. Global Actual Services is the personal lawyer of each of us, the members of the club Alliance, that will monitor and guarantee the observance of our rights in any situation having taken control of our possession.

Dmitriy Levitskiy (Ukraine)
Private lawyer