Escrow with Wise Law BV
An escrow is an amount held by a third party on behalf of two other parties in a transaction and is
commonly used as a security for payment and mitigating financial risk in a transaction. This fact sheet
explains what the legal requirements of an escrow with Wise Law BV are.
What is an escrow under Wise Law BV?
An escrow is an amount on the third party account of Wise Law BV, which amount is held on behalf
of two parties. Wise Law BV is exclusively authorised to administer and dispose of the escrow
amount. The escrow amount is not part of the assets of Wise Law BV. In case of a bankruptcy of Wise
Law BV, the escrow amount will not be part of the bankrupt’s assets.
What needs to be in the escrow agreement?
An escrow agreement is drafted and signed before transfer of the amount into the escrow account.
The escrow agreement sets out the terms and conditions of the escrow. In general such escrow
agreement shall include (inter alia):
- a description of the background of the escrow and the related transaction(s);
- the escrow amount;
- the appointment of Wise Law BV as escrow agent;
- appointment of the representatives of the parties who may instruct Wise Law BV in relation to
the escrow agreement; - the conditions for release of the escrow;
- rights and obligations of Wise Law BV as the escrow agent;
- termination of the escrow agreement;
- choice for applicable laws (or, if so desired, a choice for arbitration).
The escrow agreement is signed by both parties and Wise Law BV.
When will the escrow amount be released?
Wise Law BV releases the amount held in escrow by way of payment to a party in case of one of the
following events:
- Wise Law BV has received confirmation from all parties that the conditions for payment (as set
out in the escrow agreement) have been met; - all parties have agreed upon payment to a party and have requested Wise Law BV to make such
payment; or - a court has ruled in a binding and enforceable judgement (or an arbitrator has given a binding
advice, if applicable) that Wise Law BV shall make payment to a party. - A lack of clarity about if and to whom payment should be made means that Wise Law BV cannot make any payment.
