An escrow account is a trust account in which the release of funds is subject to the fulfilment of certain conditions stated in the escrow agreement.
Such an agreement would appoint us as escrow agent and the funds would be held until a specified event occurs. Upon confirmation of the occurrence of the event the money is released to the party who will benefit from the account.
An escrow account is useful in instances such as the sale of goods and in the case of a disputed amount in pending litigation.
As a firm of attorneys, we are best suited to provide escrow services as we provide a legally binding undertaking which can be relied upon in court. We are therefore totally reliable and efficient.
How the escrow process works
The process begins when the parties agree to use us as escrow agent and consent to the investment of the funds in an interest-bearing account.
The funds are then deposited into our trust account and the interest accrues to the party depositing the funds.
Once the agreement is signed the funds will be released to the party who will benefit from the account on the happening of the relevant event described in the agreement (the “Trigger Event”). What this will entail depends on the nature of the transaction.
For example in the sale of movable assets this event could be the delivery of the asset. In the sale of a business it could be the completion of a due diligence investigation.
Upon release of the funds, any interest accrued is paid to the party depositing the funds. Should the transaction fail to proceed for whatever reason, the funds will be repaid to the party depositing the funds.
We will not represent or act for any party, and will act impartially in our dealings with the parties concerned.
Should any dispute arise between the parties regarding payment of the funds, and the Trigger Event is delayed or does not occur, we will release the funds only as directed by a court or arbitrator as the case may be, or in terms of a written agreement between the parties.