Escrow Account Agreement Sample

When entering into any kind of financial transaction, it`s important to have a clear understanding of the terms and conditions involved. One way to ensure that everyone involved in a transaction is on the same page is by utilizing an escrow account.

An escrow account is a type of trust account where funds are held by a third party (the escrow agent) until certain conditions of a transaction are met. This could include the completion of a sale, the fulfillment of certain contractual obligations, or the resolution of a dispute.

To establish an escrow account, an escrow account agreement must be put in place. This agreement outlines the terms and conditions of the account, including the roles and responsibilities of each party involved.

To get a better understanding of what an escrow account agreement might look like, we`ve provided a sample below:


This Escrow Account Agreement (“Agreement”) is made and entered into on [DATE], by and among [PARTY 1 NAME] (“Seller”), [PARTY 2 NAME] (“Buyer”), and [ESCROW AGENT NAME] (“Escrow Agent”).


WHEREAS, Seller and Buyer have entered into an agreement (“Agreement”) for the sale and purchase of [DESCRIPTION OF ITEM/PROPERTY];

WHEREAS, the parties wish to establish an escrow account in connection with the Agreement; and

WHEREAS, the parties have selected Escrow Agent to act as the escrow agent for the account.


1. Establishment of Escrow Account. Seller and Buyer hereby establish an escrow account for the purpose of holding funds related to the Agreement.

2. Funds to be Held in Escrow. Seller and Buyer agree to deposit the following funds into the escrow account:

• [AMOUNT] from Buyer, to be held until [CONDITIONS FOR RELEASE]; and

• [AMOUNT] from Seller, to be held until [CONDITIONS FOR RELEASE].

3. Release of Funds. The funds held in the escrow account shall be released by the Escrow Agent according to the following conditions:



• If the conditions for release of the funds are not met, the Escrow Agent shall return the funds to their respective parties.

4. Dispute Resolution. In the event of a dispute between the parties related to the Agreement or the escrow account, the parties agree to submit to mediation or binding arbitration.

5. Fees. The parties shall be responsible for the fees associated with establishing and maintaining the escrow account, as well as any fees related to the release of funds.

6. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of [STATE OR COUNTRY OF JURISDICTION].

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.


By: ______________________ By: ______________________ By: ______________________

Print Name: _______________ Print Name: _______________ Print Name: _______________

As you can see from the sample agreement, an escrow account agreement includes key terms such as the establishment of the account, the funds to be held in escrow, conditions for release of funds, dispute resolution, fees, and governing law.

By utilizing an escrow account and a clear and comprehensive escrow account agreement, parties can minimize risk and ensure a smooth transaction process.