Escrow

Escrow is a financial arrangement involving a neutral third party called an escrow agent, who holds funds or assets in trust while two or more other parties complete a transaction or resolve a dispute. This arrangement is commonly used in real estate transactions, online sales, and intellectual property agreements to ensure that all conditions agreed upon by the parties are fulfilled before the assets or funds are released.

Key elements of an escrow arrangement include:

The use of escrow provides added security for transactions by protecting both the buyer and seller from potential fraud. For the buyer, it ensures that the goods or property are as promised before funds are released. For the seller, it guarantees that they will receive payment once they meet the terms of the sale. This system of checks and balances plays a crucial role in building trust between parties who may not have a previous relationship.