Escrow Agent

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The escrow agent is an independent third party in charge of holding the assets, documents, and/or money in escrow until the contractual condition is fulfilled in the terms and conditions established by the parties in the escrow agreement. The escrow agent might be a natural person or entity.

The escrow agent must strictly comply with the escrow instructions set by the parties in the escrow agreement. Additionally, the escrow agent has fiduciary duties with all the parties to the escrow agreement. If the escrow agent fails to comply with the escrow instructions or acts with negligence, the escrow agent shall be liable for the losses that occurred as a result of the breach of contract or negligence.

The escrow agent is entitled to charge fees for performing its duties. Such fees may vary depending on the nature of the escrow agent, and the type and sophistication of the transaction.

[Last updated in July of 2021 by the Wex Definitions Team]