Escrow clause: Copy, customize, and use instantly
Introduction
An escrow clause establishes the terms under which funds, securities, or other assets are held in trust by a third party (the escrow agent) until specified conditions are met. This clause is commonly used in business transactions to ensure that the conditions of an agreement are fulfilled before the assets are transferred. It provides security to both parties in a transaction by ensuring that the agreed-upon conditions are met before funds or assets are released.
Below are templates for escrow clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Escrow clause for funds held in escrow for transaction completion
This variation applies when funds are held in escrow until the completion of a transaction.
The Buyer shall deposit [insert amount] into escrow with [Escrow Agent] on the Closing Date. The escrowed funds will be released to the Seller upon the completion of all closing conditions set forth in this Agreement, including the transfer of ownership of the business. If the transaction is not completed within [insert number of days], the escrow funds will be returned to the Buyer.
Escrow clause for retention of funds for indemnification purposes
This variation applies when funds are held in escrow for indemnification purposes.
The Seller agrees to deposit [insert amount] into an escrow account with [Escrow Agent] to secure any indemnification obligations under this Agreement. These funds will be held for a period of [insert number of months] after the Closing Date and will be released to the Seller upon the expiration of this period, unless a valid claim for indemnification has been made.
Escrow clause for escrow of shares for post-closing adjustments
This variation applies when shares are held in escrow for post-closing adjustments to the transaction.
The Buyer shall deposit [insert number of shares] into escrow with [Escrow Agent] on the Closing Date. These shares will be held in escrow for a period of [insert number of months] to account for any post-closing adjustments based on the final valuation of the business. The escrowed shares will be released to the Seller once the final adjustment has been determined.
Escrow clause for escrow of cash for performance guarantee
This variation applies when cash is held in escrow as a performance guarantee.
The Buyer agrees to deposit [insert amount] into escrow with [Escrow Agent] to guarantee the performance of the Seller's obligations under this Agreement. The escrowed funds will be released to the Seller upon the fulfillment of all performance obligations. If the Seller fails to meet the agreed-upon performance metrics, the Buyer may make a claim against the escrowed funds.
Escrow clause for security of loan repayment
This variation applies when escrow is used to secure the repayment of a loan.
The Borrower shall deposit [insert amount] into escrow with [Escrow Agent] as security for the repayment of the loan under this Agreement. The escrowed funds will be held until the loan is fully repaid, at which point the funds will be released to the Borrower. If the Borrower defaults on the loan, the Escrow Agent will release the funds to the Lender in accordance with the terms of this Agreement.
Escrow clause for deposit of purchase price in case of contingencies
This variation applies when the purchase price is deposited into escrow due to contingencies.
The Buyer shall deposit the full purchase price of [insert amount] into escrow with [Escrow Agent] on the Closing Date. The escrowed funds will be held until the completion of the due diligence process and the satisfaction of all contingencies outlined in this Agreement. Upon satisfaction of the contingencies, the funds will be released to the Seller.
Escrow clause for conditional release of funds
This variation applies when funds are released from escrow under specific conditions.
The escrowed funds shall be released to the Seller upon the occurrence of the following events: [insert condition 1], [insert condition 2], and [insert condition 3]. If the conditions are not met within [insert number of days] of the Closing Date, the funds will be returned to the Buyer, unless otherwise agreed upon by both parties.
Escrow clause for holdback for future claims
This variation applies when a portion of the purchase price is held in escrow to cover future claims.
A holdback of [insert amount or percentage] of the purchase price will be placed into escrow with [Escrow Agent] to cover any future claims arising from breaches of representations, warranties, or covenants. The holdback will be held for [insert number of months] following the Closing Date, at which point it will be released to the Seller, less any amounts claimed by the Buyer for indemnification.
Escrow clause for release of funds upon completion of specified obligations
This variation applies when funds are held in escrow until certain obligations are fulfilled.
The escrowed funds will be released to the Seller upon completion of the following obligations: [insert obligation 1], [insert obligation 2], and [insert obligation 3]. The Escrow Agent will determine whether the obligations have been met in accordance with the terms of this Agreement and will release the funds accordingly.
Escrow clause for payment of taxes or other liabilities
This variation applies when funds are held in escrow for the payment of taxes or liabilities.
The Seller agrees to deposit [insert amount] into escrow with [Escrow Agent] to cover any taxes or liabilities that arise as a result of the transaction. The Escrow Agent will release the funds to the appropriate tax authorities or creditors upon notification of any outstanding liabilities, or to the Seller once all taxes and liabilities are satisfied.
Escrow clause for escrow of intellectual property rights
This variation applies when intellectual property rights are held in escrow.
The Seller agrees to deposit the rights to certain intellectual property, including patents, trademarks, and copyrights, into escrow with [Escrow Agent]. The intellectual property will be held in escrow until the Seller fulfills its obligations under this Agreement, including the transfer of full ownership rights to the Buyer. The intellectual property will be released to the Buyer once all conditions are met.
Escrow clause for release of funds upon verification of compliance
This variation applies when funds are released upon verification of compliance with terms.
The funds held in escrow will be released to the Seller upon verification by the Escrow Agent that the Buyer has complied with all necessary terms and conditions outlined in this Agreement. The Escrow Agent will review the relevant documents and certifications before releasing the funds.
Escrow clause for third-party verification of transaction conditions
This variation applies when a third-party must verify conditions before funds are released.
The Escrow Agent will release the escrowed funds to the Seller only after a third-party auditor or legal professional has verified that the conditions specified in this Agreement have been met. The third-party must provide a written certification of compliance before the release of the funds.
Escrow clause for dispute resolution involving escrowed funds
This variation applies when there is a dispute over the release of escrowed funds.
In the event of a dispute regarding the release of escrowed funds, the Escrow Agent shall hold the funds in escrow until the dispute is resolved. If the dispute is not resolved within [insert number of days], the funds will be returned to the Buyer unless otherwise ordered by a court of competent jurisdiction or as mutually agreed by both parties.
Escrow clause for multiple beneficiaries of escrowed funds
This variation applies when the escrowed funds are for multiple beneficiaries.
The escrowed funds shall be distributed among multiple beneficiaries, including [insert name of beneficiaries], in accordance with the terms of this Agreement. The Escrow Agent will distribute the funds to each beneficiary based on their respective entitlements, as outlined in the transaction documents.
Escrow clause for release of funds based on specified milestones
This variation applies when the release of funds is tied to specific milestones.
The Escrow Agent shall release escrowed funds to the Seller upon the achievement of the following milestones: [insert milestone 1], [insert milestone 2], and [insert milestone 3]. The Seller must provide the Escrow Agent with evidence of milestone completion, and the Escrow Agent will release the funds accordingly.
Escrow clause for transfer of assets with performance guarantee
This variation applies when assets are transferred with a performance guarantee held in escrow.
The Seller agrees to transfer ownership of [insert asset(s)] to the Buyer, subject to a performance guarantee. The Buyer will deposit [insert amount] into an escrow account with [Escrow Agent] to ensure the fulfillment of the Seller’s obligations under this Agreement. The escrowed funds will be released to the Seller upon satisfactory completion of the agreed performance milestones.
Escrow clause for withholding funds pending investigation
This variation applies when funds are withheld pending an investigation.
The Company agrees to deposit [insert amount] into escrow with [Escrow Agent] until an investigation into potential breaches of the Agreement is completed. If the investigation concludes that no breach occurred, the funds will be released to the Seller; if a breach is found, the funds will be used to compensate the Buyer for any damages.
Escrow clause for escrow agent’s discretion in releasing funds
This variation applies when the Escrow Agent has discretion in releasing funds.
The Escrow Agent shall release the escrowed funds to the Seller upon the Escrow Agent’s determination that the conditions set forth in this Agreement have been satisfied. If the Escrow Agent is uncertain, they may seek guidance from a neutral third-party arbitrator before making the release decision.
Escrow clause for inclusion of interest earned on escrowed funds
This variation applies when interest earned on escrowed funds is included in the payout.
The funds held in escrow by the Escrow Agent will accrue interest during the holding period. The interest earned on the escrowed funds will be added to the principal amount and distributed to the Seller upon release, unless otherwise stipulated in this Agreement.
Escrow clause for funds held until resolution of a claim
This variation applies when funds are held until a claim is resolved.
The funds will be held in escrow by [Escrow Agent] until any claims arising from this Agreement are resolved. If no claims are made within [insert number of months] from the Closing Date, the funds will be released to the Seller. If claims are made, the funds will be used to settle the claims according to the outcome of the dispute resolution process.
Escrow clause for delayed release contingent on further documentation
This variation applies when further documentation is required before funds are released.
The Escrow Agent shall hold the funds in escrow until the Buyer has submitted the necessary documentation, including [list required documents], to confirm the completion of the transaction. Once the Buyer provides the required documents, the Escrow Agent will release the funds to the Seller.
Escrow clause for cross-border escrow arrangements
This variation applies to cross-border transactions where escrow is set up with an international agent.
The Buyer and Seller agree that the funds will be held in escrow with [Escrow Agent], located in [insert jurisdiction], pending the completion of the transaction. The funds will be subject to the laws of [insert jurisdiction] and will be released upon satisfaction of the conditions outlined in this Agreement.
Escrow clause for release of funds upon certification of delivery
This variation applies when funds are released after confirmation of delivery.
The Escrow Agent will release the escrowed funds to the Seller once the Buyer has certified in writing that the delivered goods meet the specifications outlined in this Agreement. The Buyer must provide such certification within [insert number of days] days from delivery.
Escrow clause for limited release of funds
This variation applies when only a portion of the escrowed funds can be released at a time.
The Escrow Agent shall release a portion of the escrowed funds to the Seller upon satisfaction of specific milestones. The remaining funds will continue to be held in escrow until additional milestones are completed, as outlined in this Agreement.
Escrow clause for temporary holdback for potential refunds
This variation applies when funds are held back temporarily for potential refunds.
A temporary holdback of [insert amount] will be placed in escrow to cover potential refunds or returns of products. The holdback will be released to the Seller once the refund period has expired, and no valid refund claims are made.
Escrow clause for release conditioned on warranty verification
This variation applies when funds are released after warranty verification.
The escrowed funds will be released to the Seller only after the Buyer confirms that the warranty conditions for the purchased goods have been met. The Buyer must submit a written confirmation within [insert number of days] days from the date of delivery, after inspecting the goods.
Escrow clause for allocation of funds based on performance criteria
This variation applies when funds are allocated based on performance-based criteria.
The Escrow Agent will release portions of the escrowed funds to the Seller based on the performance metrics outlined in this Agreement. The funds will be released according to the achievement of the following milestones: [insert performance criteria].
Escrow clause for third-party arbitration to release funds
This variation applies when third-party arbitration determines the release of funds.
In the event of a dispute over the release of escrowed funds, the Escrow Agent shall withhold the funds until the dispute is resolved through binding arbitration. The arbitrator’s decision will dictate the release of the funds to the appropriate party.
Escrow clause for automatic release of funds after a specified period
This variation applies when funds are automatically released after a specific period unless objections are raised.
The funds held in escrow will be automatically released to the Seller [insert number of days] days after the Closing Date, unless the Buyer objects in writing within that period, citing valid reasons for withholding the release. If no objections are raised, the funds will be deemed to be released.
Escrow clause for conditional release tied to future performance
This variation applies when the release of funds is contingent on future performance.
The release of escrowed funds will be contingent on the performance of the Seller over the next [insert number of months]. The Buyer may request an audit of the Seller’s performance before the funds are released. If the Seller’s performance meets the agreed benchmarks, the funds will be released to the Seller.
Escrow clause for allocation of escrowed funds based on a purchase price adjustment
This variation applies when the funds held in escrow are related to a purchase price adjustment.
The amount of escrowed funds will be adjusted according to the final purchase price, as determined by the post-closing adjustment process. Any additional amounts owed by the Buyer will be covered by the escrowed funds, and the remaining funds will be released to the Seller.
Escrow clause for release of funds subject to meeting financial conditions
This variation applies when funds are held until financial conditions are met.
The escrowed funds shall be released to the Seller upon verification that the financial conditions, including the payment of all debts and liabilities, have been met by the Seller. The verification must be confirmed by an independent auditor selected by the Buyer.
Escrow clause for release after clearance of regulatory hurdles
This variation applies when regulatory approval is needed before the funds are released.
The escrowed funds will be released to the Seller upon the clearance of all required regulatory approvals, including approvals from [insert regulatory bodies]. The Buyer is responsible for ensuring that these approvals are obtained within [insert number of days] days of the Closing Date.
Escrow clause for failure to meet contractual conditions
This variation applies when funds are withheld if the contractual conditions are not met.
The escrowed funds will be withheld if the Seller fails to meet the contractual conditions outlined in this Agreement. If the conditions are not met within [insert number of days], the funds will be returned to the Buyer, and the Seller will have no claim to the escrowed funds.
Escrow clause for use of funds for dispute resolution expenses
This variation applies when the escrowed funds are used to cover dispute resolution costs.
In the event of a dispute, the escrowed funds may be used to cover the costs of dispute resolution, including legal fees, arbitration costs, and other related expenses. The remainder of the funds will be distributed to the Seller or Buyer based on the final resolution of the dispute.
Escrow clause for payment of liabilities from escrowed funds
This variation applies when the escrowed funds are used to pay liabilities.
A portion of the escrowed funds will be reserved for the payment of any outstanding liabilities of the Seller, including taxes, debts, and other financial obligations. The funds will be disbursed to creditors directly from the escrow account, with the remaining funds released to the Seller upon clearance of the liabilities.
Escrow clause for release upon completion of specified tasks
This variation applies when funds are released after certain tasks or actions are completed.
The funds held in escrow will be released to the Seller once the following tasks are completed: [insert task 1], [insert task 2], and [insert task 3]. The Buyer must confirm in writing that each task has been satisfactorily completed before the release of funds.
Escrow clause for escrow agent acting on mutual agreement
This variation applies when the escrow agent releases funds upon mutual agreement of both parties.
The funds held in escrow will be released to the Seller upon mutual written agreement of the Buyer and Seller that all conditions have been met. If either party disputes the release of the funds, the funds will remain in escrow until the dispute is resolved.
Escrow clause for payment of third-party claims from escrow
This variation applies when third-party claims are paid from the escrowed funds.
In the event that any third-party claims are made against the Company or the transaction, the Escrow Agent will use the escrowed funds to pay such claims. The remaining funds will be released to the Seller after the resolution of any outstanding claims.
Escrow clause for post-closing obligations release
This variation applies when the funds are held for post-closing obligations.
The Buyer and Seller agree that a portion of the purchase price will be held in escrow to satisfy any post-closing obligations of the Seller under this Agreement. The escrowed funds will be released once the post-closing obligations are verified as completed.
Escrow clause for escrowed funds used for capital expenditures
This variation applies when escrowed funds are used for specific capital expenditures.
A portion of the escrowed funds will be used to cover the capital expenditures outlined in the Agreement. These funds will be released to cover expenses such as [insert specific expenses], with the remainder returned to the Seller once the capital expenditures are verified.
Escrow clause for the inclusion of buyer's specific requirements
This variation applies when funds are held based on specific buyer's requirements.
The funds will be held in escrow and released to the Seller upon the Buyer’s verification that the Seller has fulfilled all specific requirements, including [insert requirement 1], [insert requirement 2], and [insert requirement 3]. The Buyer is responsible for notifying the Escrow Agent when the requirements have been met.
Escrow clause for performance-based payout over time
This variation applies when the release of escrowed funds is based on performance over time.
A portion of the escrowed funds will be released to the Seller at regular intervals, based on the achievement of specific performance milestones. The Escrow Agent will release the funds upon the Buyer’s verification that the milestones have been met according to the schedule outlined in this Agreement.
Escrow clause for third-party verification of completion
This variation applies when the funds are released after third-party verification.
The Escrow Agent shall release the escrowed funds to the Seller after receiving written confirmation from an independent third-party verifier that the conditions of the Agreement have been fulfilled. The third-party verifier must be approved by both the Buyer and Seller.
Escrow clause for joint release upon mutual consent
This variation applies when both parties must consent before the funds are released.
The escrowed funds will be released to the Seller upon mutual written consent from both the Buyer and the Seller. If either party objects to the release, the funds will remain in escrow until the dispute is resolved or further instructions are provided by both parties.
Escrow clause for deposits held until satisfaction of regulatory approvals
This variation applies when funds are held until regulatory approvals are satisfied.
The funds will be held in escrow until all necessary regulatory approvals are obtained. The Escrow Agent will release the funds to the Seller once the Buyer has confirmed receipt of all regulatory approvals or certifications necessary for the completion of the transaction.
Escrow clause for partial release of funds based on completed conditions
This variation applies when only part of the escrowed funds is released upon completing specific conditions.
The Escrow Agent will release a portion of the escrowed funds to the Seller once [insert condition 1] has been completed, and additional portions will be released upon the completion of [insert condition 2] and [insert condition 3]. Each release is contingent on the Buyer’s approval that the specified conditions have been met.
Escrow clause for deposit of securities as collateral
This variation applies when securities are used as collateral and held in escrow.
The Buyer agrees to deposit [insert number of securities] into escrow with the Escrow Agent as collateral for the completion of the terms under this Agreement. The securities will be held until the Seller fulfills its obligations under the Agreement, at which point the securities will be released to the Seller or returned to the Buyer, depending on the outcome.
Escrow clause for funds to cover liabilities post-closing
This variation applies when funds are held to cover potential liabilities after the transaction closes.
A portion of the escrowed funds will be reserved to cover any liabilities or claims that may arise after the closing of the transaction. The Buyer will notify the Escrow Agent if any claims are made, and the funds will be used to settle those claims before being released to the Seller.
Escrow clause for indemnification purposes
This variation applies when the escrowed funds are used for indemnification claims.
A portion of the purchase price will be held in escrow to secure the Seller’s indemnification obligations. The Buyer can make claims against the escrowed funds to cover any losses or damages resulting from breaches of representations, warranties, or covenants under this Agreement.
Escrow clause for funding of agreed-upon costs and expenses
This variation applies when escrowed funds are used to cover agreed-upon costs and expenses.
The Escrow Agent will release the escrowed funds to the Buyer to cover the agreed-upon costs and expenses related to the transaction, including [insert specific costs]. Any remaining funds will be released to the Seller upon completion of the transaction.
Escrow clause for release upon meeting of third-party conditions
This variation applies when funds are held until third-party conditions are met.
The funds held in escrow will be released to the Seller upon the satisfaction of conditions specified by [insert third-party name], including [insert condition]. The Escrow Agent will release the funds once written confirmation of the third-party’s approval or satisfaction is received.
Escrow clause for escrow release based on delivery verification
This variation applies when funds are held until delivery is verified.
The escrowed funds will be released to the Seller once the Buyer verifies in writing that the delivered goods meet the specifications outlined in this Agreement. The Buyer shall have [insert number of days] to inspect and verify delivery before releasing the funds to the Seller.
Escrow clause for release after completion of legal review
This variation applies when the funds are held until legal review is completed.
The Escrow Agent will hold the funds until the Buyer has completed a legal review of the transaction documents. Upon the Buyer’s confirmation that the documents meet all legal requirements, the Escrow Agent will release the funds to the Seller.
Escrow clause for securing performance milestones
This variation applies to securing performance milestones with escrowed funds.
A portion of the escrowed funds will be held to secure the Seller’s performance under specific milestones, including [insert milestone 1], [insert milestone 2], and [insert milestone 3]. The Escrow Agent will release funds to the Seller upon the completion of each milestone, as verified by the Buyer.
Escrow clause for release of funds upon successful closing
This variation applies when the funds are released upon the successful closing of the transaction.
The funds will be held in escrow and released to the Seller upon the successful completion of the transaction closing. The Buyer shall confirm in writing that all closing conditions, including the transfer of ownership and payment of fees, have been met before the Escrow Agent releases the funds.
Escrow clause for escrow held to satisfy warranty obligations
This variation applies when funds are held in escrow to cover potential warranty claims.
A portion of the purchase price will be held in escrow for [insert number of months] to cover any warranty claims arising from defects in the product or services provided by the Seller. The funds will be released to the Seller once the warranty period has passed and no claims are made.
Escrow clause for release conditioned on audit results
This variation applies when the release of escrowed funds is conditioned on audit results.
The funds held in escrow will be released to the Seller upon the completion of an audit by a third-party auditor. The audit must confirm that the financial records and other relevant documentation meet the requirements set forth in this Agreement. If discrepancies are found, the funds will be withheld until resolution.
Escrow clause for delay in registration of intellectual property rights
This variation applies when the release is delayed pending the registration of intellectual property.
The escrowed funds will be held until the registration of [insert intellectual property, e.g., patents, trademarks] is completed by the Seller. The Escrow Agent will release the funds to the Seller once the intellectual property has been properly registered with the relevant authorities.
Escrow clause for dispute resolution involving escrowed funds
This variation applies when funds are held pending the resolution of a dispute.
In the event of a dispute between the parties, the Escrow Agent shall hold the funds until the dispute is resolved through mediation or arbitration. The funds will be released according to the decision of the arbitrator or mediator, and any claims arising from the dispute will be addressed from the escrowed amount.
Escrow clause for use of funds in case of delayed performance
This variation applies when funds are held to address potential delays in performance.
A portion of the escrowed funds will be withheld by the Escrow Agent to cover any financial losses resulting from the Seller’s failure to meet performance deadlines. The funds will be released to the Seller upon verification of the completion of all performance obligations.
Escrow clause for release after successful training or certification
This variation applies when the funds are held until training or certification conditions are met.
The escrowed funds will be released to the Seller once the Buyer verifies that all necessary training or certification processes have been completed, including [insert specific training/certification]. The Buyer has [insert number of days] to confirm the completion of these conditions.
Escrow clause for payment of contingent liabilities from escrow
This variation applies when funds are held for contingent liabilities that may arise.
The Seller agrees to deposit a portion of the purchase price into escrow to cover any contingent liabilities that may arise, such as unresolved litigation or potential claims. The Escrow Agent will disburse the funds to cover these liabilities once they are verified and confirmed.
Escrow clause for buyer’s due diligence and document review
This variation applies when the Buyer’s due diligence and document review must be completed before release.
The funds will be held in escrow until the Buyer has completed its due diligence review, including the review of financial documents and the verification of representations and warranties. Upon satisfactory completion of the review, the funds will be released to the Seller.
Escrow clause for post-closing reconciliation of purchase price
This variation applies to escrowed funds used for post-closing price reconciliation.
A portion of the purchase price will be held in escrow for [insert number of months] to allow for the post-closing reconciliation of the purchase price based on final adjustments. The funds will be released to the Seller once all adjustments are verified and agreed upon by both parties.
Escrow clause for performance security in case of delivery failures
This variation applies when funds are held as security in case of delivery failures.
A portion of the funds will be placed in escrow to secure the delivery of goods or services as specified in this Agreement. If the Seller fails to deliver the goods or services as agreed, the Buyer may claim the funds from escrow to cover any resulting costs or losses.
Escrow clause for release upon legal compliance confirmation
This variation applies when funds are released upon confirmation of legal compliance.
The escrowed funds will be held until the Seller provides confirmation of compliance with all applicable laws and regulations, including any regulatory approvals required for the transaction. The funds will be released to the Seller upon receipt of the compliance confirmation.
Escrow clause for buyer’s right to withhold funds for tax liabilities
This variation applies when the Buyer has the right to withhold funds for potential tax liabilities.
The Buyer may withhold up to [insert percentage] of the escrowed funds to cover any tax liabilities that may arise post-closing. The withheld amount will be released to the Seller upon confirmation that no additional tax liabilities exist after [insert number of months].
Escrow clause for return of funds in case of non-fulfillment of conditions
This variation applies when the funds are returned if conditions are not fulfilled.
If the conditions precedent to closing, including [insert conditions], are not fulfilled by [insert date], the funds held in escrow shall be returned to the Buyer, and no funds will be released to the Seller. Both parties agree to cooperate to meet the conditions, but if unmet, the funds shall be returned to the Buyer.
Escrow clause for partial release based on milestone achievements
This variation applies when funds are released in parts based on the achievement of milestones.
The funds will be held in escrow and released in installments as specific milestones are met. The first installment of [insert amount] will be released upon completion of [insert milestone 1], with further installments to be paid upon the completion of [insert milestone 2] and [insert milestone 3].
Escrow clause for payment of penalties or damages from escrowed funds
This variation applies when escrowed funds are used to cover penalties or damages.
The funds held in escrow shall be used to cover any penalties, fines, or damages resulting from the Seller’s non-compliance with the terms of this Agreement. The Buyer may make claims against the escrowed funds to cover these costs, with the remaining balance being released to the Seller once all obligations are met.
Escrow clause for security against unforeseen risks
This variation applies when funds are held as security for unforeseen risks.
A portion of the purchase price will be held in escrow as security against unforeseen risks or liabilities that may arise after the closing. If the Buyer identifies such risks, the funds will be used to cover the related costs, and the remaining funds will be released to the Seller once the risks are resolved.
Escrow clause for escrow of real property during transfer
This variation applies to the escrow of real property during the transfer process.
The Seller agrees to place the title deed of the real property into escrow with [Escrow Agent] until the transfer conditions outlined in this Agreement are met. The Escrow Agent will release the title deed to the Buyer once all conditions have been satisfied and payment has been made in full.
Escrow clause for funds to cover unexpected costs from the Seller’s liabilities
This variation applies when escrowed funds cover unexpected costs resulting from the Seller’s liabilities.
A portion of the purchase price will be held in escrow for [insert number of months] to cover any unexpected costs arising from liabilities, including outstanding debts, legal obligations, or claims. The funds will be released to the Seller once all claims or liabilities have been resolved.
Escrow clause for satisfaction of contractual obligations by third parties
This variation applies when funds are held to ensure third-party obligations are satisfied.
The escrowed funds will be held until the third-party contractor, [insert contractor name], satisfies its obligations under the contract with the Buyer. Upon verification of the third-party’s performance, the funds will be released to the Seller.
Escrow clause for use of funds to settle tax-related claims
This variation applies when escrowed funds are used to settle tax-related claims.
The escrowed funds will be used to settle any tax-related claims arising from the transaction, including unpaid taxes or penalties. The funds will be disbursed to the relevant tax authorities upon verification of the claims. Any remaining funds will be released to the Seller.
Escrow clause for release contingent on delivery confirmation
This variation applies when funds are held until delivery is confirmed.
The funds held in escrow will be released to the Seller upon the Buyer’s confirmation that the goods or services have been delivered in accordance with the terms of this Agreement. The Buyer will provide written confirmation of delivery within [insert number of days] after receipt.
Escrow clause for conditional release based on third-party verification
This variation applies when third-party verification is required for the release of funds.
The escrowed funds will be released to the Seller once a third-party auditor, chosen by mutual agreement of both parties, verifies that all contractual obligations have been fulfilled by the Seller. The auditor’s certification will be binding for the release of the funds.
Escrow clause for release upon satisfaction of performance criteria
This variation applies when funds are held until performance criteria are met.
A portion of the escrowed funds will be released to the Seller based on the satisfaction of the following performance criteria: [insert performance metric 1], [insert performance metric 2]. The Buyer will review and confirm completion of the criteria before releasing the funds.
Escrow clause for release upon settlement of legal disputes
This variation applies when funds are held until any legal disputes are settled.
In the event of any legal disputes arising from this Agreement, the escrowed funds will be held until the dispute is settled either through negotiation or court order. The funds will be released to the appropriate party according to the resolution of the dispute.
Escrow clause for payment of transaction-related costs
This variation applies when escrowed funds are used to pay transaction-related costs.
A portion of the escrowed funds will be used to cover all transaction-related costs, including legal fees, closing costs, and registration fees. The Escrow Agent will release the remaining funds to the Seller after the transaction costs have been paid.
Escrow clause for withholding funds for potential adjustments
This variation applies when funds are withheld for potential price adjustments.
A portion of the purchase price will be held in escrow to account for any adjustments that may arise due to post-closing working capital calculations. If an adjustment is required, the necessary amount will be deducted from the escrowed funds and the remainder released to the Seller.
Escrow clause for withholding funds in case of undisclosed liabilities
This variation applies when funds are withheld due to potential undisclosed liabilities.
The Buyer shall hold [insert percentage] of the purchase price in escrow for [insert number of months] to cover any undisclosed liabilities or obligations of the Seller. If no such liabilities arise, the funds will be released to the Seller at the end of the escrow period.
Escrow clause for release of funds subject to specific milestones
This variation applies when escrowed funds are released upon the completion of milestones.
The funds held in escrow will be released to the Seller upon the completion of the following milestones: [insert milestone 1], [insert milestone 2]. Each milestone must be verified by the Buyer before funds are released.
Escrow clause for release based on tax clearance
This variation applies when the release of escrowed funds is contingent upon tax clearance.
The escrowed funds will be released to the Seller only after the Buyer receives confirmation from the relevant tax authority that all taxes related to the transaction have been paid and that there are no outstanding tax obligations.
Escrow clause for release contingent on buyer’s satisfaction with audit results
This variation applies when funds are released after the Buyer is satisfied with audit results.
The Buyer shall hold the escrowed funds until the results of a third-party audit of the Seller’s financial records are reviewed and deemed satisfactory. If the audit reveals any discrepancies, the funds may be withheld until the issues are resolved.
Escrow clause for use of funds for potential warranty claims
This variation applies when escrowed funds are held for potential warranty claims.
The Buyer will retain [insert amount] in escrow to cover any warranty claims arising from the sale of goods or services. If no claims are made within the warranty period, the funds will be released to the Seller. Any claims will be paid from the escrowed funds.
Escrow clause for release of funds based on completion of contractual conditions
This variation applies when the release of funds is based on completing specific contractual conditions.
The escrowed funds shall be released to the Seller upon completion of the following conditions: [insert condition 1], [insert condition 2]. The Buyer will verify that all conditions have been met before instructing the Escrow Agent to release the funds.
Escrow clause for partial release of funds upon agreement of both parties
This variation applies when partial release of escrowed funds is agreed upon by both parties.
The Escrow Agent may release portions of the escrowed funds to the Seller upon the written agreement of both the Buyer and Seller. The release of funds will occur in increments as mutually agreed upon in writing by both parties.
Escrow clause for conditions precedent to release of funds
This variation applies when the release of escrowed funds is contingent upon meeting specified conditions precedent.
The funds held in escrow will be released to the Seller upon the satisfaction of the following conditions precedent: [insert condition 1], [insert condition 2]. These conditions must be met within [insert time period] from the Closing Date.
Escrow clause for release based on independent third-party verification
This variation applies when an independent third-party verifies the fulfillment of conditions before releasing funds.
The escrowed funds will be released to the Seller after independent verification by [insert name of third-party] confirming that the conditions of the Agreement have been fulfilled. The third-party’s report will be binding for the release of the funds.
Escrow clause for release upon expiration of dispute resolution period
This variation applies when funds are held during a dispute resolution period.
The funds will be held in escrow for [insert number of days] following the Closing Date to allow time for any disputes regarding the transaction to be resolved. The Escrow Agent will release the funds to the Seller if no dispute is raised within this period.
Escrow clause for escrow account managed by a specific institution
This variation applies when the escrow account is managed by a specified financial institution.
The escrowed funds will be held by [insert name of financial institution], and the Escrow Agent will release the funds to the Seller upon confirmation from the Buyer that all conditions of this Agreement have been met. Any disputes regarding the release of funds will be handled by the Escrow Agent in accordance with the institution’s guidelines.
Escrow clause for funds to cover potential breaches of contract
This variation applies when funds are held to cover potential breaches of contract.
A portion of the funds will be held in escrow to cover any breaches of contract by the Seller. If the Buyer identifies a breach, the funds will be used to compensate for any losses incurred as a result of the breach, with the remainder released to the Seller once the breach is resolved.
Escrow clause for final payment after completion of all obligations
This variation applies when the final payment is made only after all obligations are completed.
The final portion of the purchase price will be held in escrow and released to the Seller upon completion of all obligations under this Agreement, including [insert obligations]. The Buyer will verify that all obligations have been completed before instructing the Escrow Agent to release the funds.
Escrow clause for release contingent on successful transfer of assets
This variation applies when funds are released based on the successful transfer of assets.
The escrowed funds will be released to the Seller upon the successful transfer of assets, including [insert list of assets]. The Buyer must confirm in writing that the transfer has been completed in accordance with the terms of this Agreement.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.