Why use an escrow agent?

Why use an escrow agent?

When designating an escrow agent, it is critical to be sure that the agent is an independent third party not under the influence or control of either end-user or vendor.

It is rarely a good idea to simply name one of the party’s lawyers or accountants as the escrow agent. Their duty is to their client so there is a potential conflict of interest. A founding principle of escrow agents is to remain neutral.

Further to this, those parties are not usually accustomed to the details of administering escrows or properly equipped to hold lodgements. It is therefore not recommended that a lawyer, accountant or similar professional be appointed as an escrow agent

 

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