Escrow Agreement: Definition And Situation In Turkish Law

1. In General

Escrow is a legal concept describing a financial instrument whereby an asset or escrow money is held by a third party on behalf of two other parties that are in the process of completing a transaction¹. Escrow agreement is an agreement that provides opportunity to the parties of an initial agreement to make transactions in a more secure way by keeping the payment hold in a trusted third party (escrow agent) or a secure account (escrow account).

Escrow Agreement is a very useful security mechanism in asset deals or business transactions if and when a large amount of money is involved and a certain number of obligations need to be fulfilled simultaneously. Since a variety of agreements can be subject to an escrow agreement, securities, funds and other assets can all also be held in escrow agents or accounts as well as money.