We use cookies to provide the best site experience.

Escrow account and Services

February 28, 2019 | Knowledge base

Escrow account and Services

Goldblum and Partners has carved a niche for itself as one of the most reliable escrow services provider. With all our efforts directed towards helping businesses grow, we have helped numerous businesses spruce up their operations, worldwide. We understand the enormous risk that businesses undergo, as they form strategic partnerships, across nations. With over a decade-long experience in providing escrow services to businesses, we ensure better regulation and end-to end support. We help you create an escrow agreement, chalk out favourable terms, and address your core concerns. Additionally, our Attorneys will make themselves available to you for one-to-one online consultation throughout the process.

What is an Escrow Agreement?

Escrow is a tripartite agreement, which includes the Depositor, Beneficiary or Authorised Beneficiary, and Goldblum and Partners. As one of the most trusted escrow services provider, we help you simplify this process. In this tripartite arrangement, the Depositor and the Beneficiary, mutually agree to trust the services of Goldblum and Partners.

According to this arrangement, the depositor deposits a certain document or amount, which is held in the Escrow account temporarily. While the transaction is carried out between the parties, the funds lie safe in an escrow account.

These funds or documents are then handed over to the Depositor or Beneficiary, according to the terms agreed upon, in the escrow agreement.In the Escrow Agreement, generally, the Depositor undertakes that the escrow funds must be released in favour of the Beneficiary, upon the successful fulfilment of a certain obligation or set of obligations, by the Beneficiary. Until then, the funds remain in the escrow account. In case of failure of the Beneficiary to fulfil his contractual obligations, the Depositor shall reserve the right to withdraw the funds.

So, by depositing the escrow funds into the escrow account, the Depositor transfers his contractual obligation to pay the Beneficiary or the Authorised Beneficiary, to us. However, the funds from the Escrow Account would be released to the Beneficiary or the Authorised Beneficiary only upon fulfilment of his contractual obligations, as laid down in the Escrow Agreement.

Escrow Account and Services

What is an Escrow Account?

To avoid any ambiguity or to defeat the very purposes of an escrow system, the Escrow Agreement must clearly lay down the following. With years of experience in drafting Escrow Agreements, you can trust our expertise. Below mentioned are some of the most sensitive essentials of an Escrow Agreement.

Contractual Obligations

The contractual obligations of both the parties, the Depositor and the Beneficiary or the Authorized Beneficiary must be stated clearly in the Escrow Agreement. It must clearly reflect the transaction, for which, the escrow account is opened and the exact amount of escrow funds which are to be deposited.

Inspection period

After the Beneficiary or the Authorized Beneficiary duly fulfils his obligation, and makes available the goods or services to the Depositor, then the inspection period commences.

This is the period in which, the Depositor has the right to refuse the goods or services of the Beneficiary. This right to refusal is subject to quality, quantity or other parameters, which are to be clearly stated in the Escrow Agreement, along with the number of days allowed for the completion of the same. Upon successful completion of the inspection and after receiving communication with effect to the same, we shall make payment to the beneficiary or authorised beneficiary, on behalf of the depositor.

Explicit directions by the Depositor

The Escrow Agreement must lay down the explicit directions, upon receiving which, the escrow funds shall be released to the beneficiary. The omissions or commissions must be mentioned in detail, in order to avoid any future disputes.

Dispute Resolution Mechanism

The Escrow Agreement shall lay down the mode of dispute resolution such as Arbitration, Conciliation or Mediation and the Authority to which they submit themselves. Also, it must clearly specify the legal jurisdiction, in case the dispute resolution fails.

Closure terms

The agreement must clearly specify how and when the escrow funds shall be disbursed into the account of either party. It should clearly state the contingency, and the omission or commission of which shall lead to the closure of the escrow account, which happens after the transfer of escrow funds. In case of international transactions, it must also specify the exchange rates of a certain day, which is to be taken into account for conversion.

Generally, an escrow account is closed upon the successful completion of a transaction, between the depositor and the beneficiary, or upon withdrawal by the depositor due to failure of the beneficiary to fulfil his contractual obligations.
What is an Escrow Account?

Escrow Services Advantages

With the increase in trade and commerce, Escrow services have gained prominence, and helped businesses and individuals achieve larger goals. As one of the most trusted escrow services provider, we extend an assortment of benefits, to facilitate your business. Below-listed are some of the core advantages of our escrow services.

Fulfilment of Obligations

When parties enter into a contract, there is every possibility that either of them may eventually fail to fulfil their contractual obligations. Hence, by depositing the amount into an Escrow account, the Beneficiary or Authorized Beneficiary, is assured of the Depositor's ability to pay. Conversely, the Depositor is assured that the Escrow funds would be released to the Beneficiary only upon his fulfilment of contractual obligations.

Due Diligence

By making use of Escrow services, parties to an agreement express their genuine intention and capability to enter into a transaction. This becomes essential in case of businesses or transactions, which require verification of sensitive documents, prior to the payment of consideration in lieu of the subject matter of the contract.

These are transactions wherein the subject matter of the agreement requires a thorough inspection. Here, our escrow services ensure that all the parties to an agreement possess the legal and financial capacity to conclude the agreement.

Fulfilment of Statutory obligations

Escrow funds are also held for the future fulfilment of statutory obligations such as paying taxes. These are held in cases mortgages, where taxes need to be paid according to the terms laid down between the parties. Also, employers can hold funds in an escrow account until the due date of payment of taxes and then transfer them to the concerned authorities.

Minimizes risk

When you are dealing with unknown parties, we help you minimize your risks and act as an intermediary. In the past, numerous businesses have benefitted from our escrow services, especially in the case of cross-border businesses, where there is lack of adequate interaction between the parties.

Ensures a well-structured Business

Hiring our escrow services enable businesses to lay down terms and conditions for the Beneficiary to fulfil, only after which, we release the amount in favour of the Beneficiary. To illustrate this, let us take the example of an exporter and an importer. An importer places an order which the exporter must ship. However, neither party is sure about the genuineness of the other.

So, a convenient manner in which both the parties are reassured about each other, is by hiring our escrow services, and transferring funds into an escrow account. Here, we make the entire process easier and more convenient. Here, the Importer deposits the money into an Escrow account, before the Exporter ships the goods. Upon the receipt of goods by the Exporter and after the inspection period, as laid down in the escrow agreement, we release the escrow funds accordingly.
Escrow Services Advantages
Reduces the need for Litigation

Litigation can considerably slow down the transaction, which may at times, even defeat the very purpose of the contract. However, this risk is considerably reduced with the intervention of a reliable and efficient escrow services provider, and that's where we come in.

We understand how tedious and expensive litigation can be, especially if you are transacting with countries such as China, Vietnam and Japan. We can help you overcome this hurdle by clearly laying down the terms and conditions in the Escrow Agreement.

An escrow system confirms the Depositor's ability to pay, and motivates the Beneficiary to focus on the fulfilment of his obligations, in order to get paid.

Our escrow services have greatly accelerated businesses, by providing a quintessential mode of payment, which is secure, easy and involves minimum risk. Such a mode is a prerequisite for the smooth functioning of all businesses, especially ones that run online, with minimal interaction.