escrow-account

Vocabulary Word

Definition

An 'escrow account' is like a safety deposit box for a financial transaction. It secures the funds until both parties involved fulfill their agreed conditions, like delivering goods or services.

Examples in Different Contexts

In contracting services, 'escrow accounts' are often used to manage payments between parties in a project. A contractor might discuss, 'Escrow accounts allow for staged payments based on project milestones, ensuring fair payment practices and work completion.'

Practice Scenarios

Real Estate

Scenario:

Making the down payment is significant while purchasing a house. Can you think of ways to ensure its safe handling till we finalize all the documentation?

Response:

Yes, the down payment could be kept in an escrow account. It would give peace of mind knowing that the money is secured until the deal is closed.

Law

Scenario:

The importance of ensuring that settlement funds are appropriately distributed once all legal terms have been met can't be understated.

Response:

We should place the settlement funds in an escrow account. This ensures their safekeeping until the agreement's requirements are fulfilled.