Escrow, << EHS kroh, >> is cash, a document, or other property given to one person for delivery to someone else when a certain condition is met. The holder of the property is called the escrow agent or escrow holder.
When one party to a contract gives property to an escrow agent, the second party to the contract may feel sure that the contract will actually be carried out. As a result, the second party may be encouraged to perform his or her part of the contract.
The escrow holder is an agent of both the party who deposits the escrow and the party to whom it will be delivered when the escrow condition is met. Property given to the agent cannot be returned without the approval of both parties. Once the condition of the escrow is met, the escrow holder must deliver the property according to the escrow agreement.
