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Escrow account

Financial escrow account is a bank account that is held with a neutral and financially reliable third party, the escrow agent, Factory Wallet Service BV. The escrow agent will only pay out the money in the escrow account on the basis of an agreement between the buyer and the seller.

ESCROW CONTRACT

- Released security by delivery
- Already in practice at the bank
- Trade over the internet
- Payment security for escrow contracts
- Software
- Judicial convictions
- Drafting Escrow

Security given over by delivery

With an escrow contract, agreements are made whereby one party must deliver the other party. That delivery is outsourced to a third independent party. The delivery can concern:


money for rent;
shares or valuable documents;
goods, purchases, etc.


This is about ensuring that the delivery is actually carried out on the correct contract date. Thus, both parties involved do not have to worry whether it will be executed. The third party has been given contractual responsibility through the contract to effectively execute the illegal agreements made. In this way it is ensured that things are actually done on time. What different types are there?

Already in practice at the bank

Many banks allow you to deposit money through the deposit machine at the local office. To do this, you normally count the amount in advance and place the banknotes in the machine. So you know exactly how much you want to deposit and with that you can check whether the device counts the same amount. It can happen that a certain note is not recognized, so that 9 instead of 10 hundred will be counted. At that moment the device is closed and you cannot reach it. Because it is your money and the correct amount must also be indicated, you can cancel the deposit, which will open the device again. You will be refunded the exact amount you put into it. This is a matter of trust, as it were, where you give the money to the machine and can also get it back. If the amount is correct, you can have it deposited into your account. This is the bank escrow applied in practice, where no specific contract is signed.

Trade over the internet

We all make a lot of purchases over the internet and we need to trust that payments are reliable and the purchase actually arrives. Consider, for example, buying stuff via a web store or finding a cheap ticket via the internet. In that case there is a link, which is sent to you by the webshop. It gives you the option to pay. Please note that it is your own payment choice, so you are free to transfer money with credit card, Paypal or your regular checking account. This is done via a third party. In this case it concerns the mutual confirmations, whereby the order is paid and delivered via third parties. This is also called the internet escrow contract, so that business can be done online. Please note that your firewall is up to date and that you do not provide any information if you have not requested it.

Payment security for escrow contracts

In international trade it is often a point of discussion, first deliver and then pay or pay first and then deliver. We see this regularly at Factory Wallet Service BV. Especially with countries that often have a dubious reputation. An escrow is of course a suitable solution. This is also often applied to commodity trading such as copper, gold, cobalt, nickel, etc.

Some companies are large and rent large buildings or specific floors. In addition, there are bills that must be paid and must be paid on time. The probability of payment arrears should be zero to avoid business risks. To this end, an amount is deposited with a third party to cover the expenses for a number of months. This way, payments can always be made. Consider, for example, a civil-law notary who performs this escrow obligation at the right time. This keeps the business running and there is no need to worry about timely payments.

Software

Codes that provide access to software are often kept with a third party in order to protect the company. Think of source codes or source codes, which are essential for running technical software. Nevertheless, problems can arise with that software, which requires action. To protect the code, it must be stored elsewhere, because its loss (due to circumstances) can entail high costs. In addition to software, this can also apply to texts, designs, scripts or ideas that can be used to earn money. By depositing the property in safety with a third party, nothing can be done with it, but the ownership and possible copyright are clear.

Judicial convictions

If a conviction involves monetary compensation to victims, the judicial authorities will set up an escrow fund. The suspect pays the mandatory penalty, after which the judiciary as a third party administers the money for payment to the victims. In this way, the perpetrator is eliminated with a single payment, in addition to which the judicial authorities can compensate all individual victims.

Prepare Escrow

There are many areas in which it can be useful and necessary to set up an escrow agreement. This means that agreements between two parties are made concrete and realized by an independent outsider. Always ensure that such contracts are taken with appropriate responsibles and that there are sufficient witnesses. In this way, the contract can offer one hundred percent security for the settlement of the agreements made at the agreed time. If necessary, let an expert help you to put everything on paper so that the principles and conditions are clear for the three parties.

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