Legal Definitions - depositary

A depositary is an individual or organization entrusted with holding money, documents, or other valuable items belonging to another party for safekeeping. The depositary's primary responsibility is to protect these assets and return them to the owner under agreed-upon conditions. This arrangement can be formal, involving a fee, or informal, where the safekeeping is provided without charge.

• Imagine a person renting a safe deposit box at a local bank to store important family heirlooms and original legal documents. In this scenario, the bank acts as the depositary. It is entrusted with the physical safekeeping of the valuables within the secure box, and its obligation is to protect these items and allow the renter access to them according to the rental agreement.

• Consider a situation during a real estate transaction where the buyer's down payment funds are transferred to an escrow account managed by an escrow company. Here, the escrow company functions as the depositary for those funds. It holds the money securely and only releases it to the seller once all the specific conditions of the sale contract, such as a clear title and completed inspections, have been met, thereby protecting both the buyer's and seller's interests.

• Suppose you ask a trusted friend to hold onto your spare house keys while you are away on an extended trip, without offering or expecting any payment for this favor. In this informal arrangement, your friend temporarily becomes the depositary of your keys. They are entrusted with keeping the keys safe and returning them to you upon your return, without receiving any compensation for this service.