An escrow is a contractual arrangement in which a neutral third party receives and disburses money for the primary transacting parties e.g., buyer and seller. The advantage of an escrow protects both parties by keeping the payment in a secure escrow account e.g., an attorney’s trust account, which is only released when all of the terms of an agreement are met as overseen by the neutral escrow attorney. The Escrow Attorney is NOT AN ATTORNEY FOR EITHER PARTY.
Escrows have been trending in the CBD oil and cryptocurrency industry. In such a large transaction, a certain number of obligations may need to be fulfilled before a payment is released. For example, testing the quality of the CBD oil so that it meets industry standards prior to purchase. We have handled such escrow arrangements to safely and securely complete the underlying transaction.
A typical escrow arrangement occurs as follows:
- Buyer and Seller agree to contractual terms – Either the Buyer or Seller contacts an escrow attorney. Both parties agree to the terms of the legally drafted escrow agreement. Buyer is provided the Escrow Attorney’s banking information. Seller gives the Escrow Attorney its banking information.
- Buyer pays Escrow Attorney – The Buyer submits a payment by approved payment method to our regulated Interest on Lawyers Trust Account (IOLTA). The attorney verifies the payment. Both the Buyer and Seller are notified that funds have been secured in said Trust account.
- A Deposit is paid or the Seller ships merchandise to Buyer – Upon payment verification, the Seller may require an initial deposit or may send the merchandise and submit proof of shipment.
- Buyer and Seller sign a release of funds agreement to Escrow Attorney – The Buyer and Seller sign an agreement allowing for the release of the all or any part of the funds.
- Escrow Attorney pays the Seller – Escrow Attorney releases funds to the Seller from the Trust Account.
Everyone’s happy 🙂
If you require similar assistance with opening an escrow contact us today.