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Simple English definitions for legal terms
escrow instructions
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A quick definition of escrow instructions:
Escrow instructions are a set of rules that explain what needs to happen for the person holding onto something valuable (like money or important documents) to give it to the person who is supposed to receive it. These rules are usually written down in a contract called an "escrow agreement." The instructions make sure that everyone involved knows what they need to do and when they need to do it, so that the transfer of the valuable item goes smoothly.
A more thorough explanation:
Escrow instructions are a set of rules that explain how an escrow agent should handle the assets, documents, and money held in escrow. These instructions are usually included in the escrow agreement and must be followed by the escrow agent.
Let's say you're buying a house. You and the seller agree to use an escrow agent to hold the money until the sale is complete. The escrow instructions would outline the conditions that must be met before the money is released to the seller. For example, the instructions might say that the seller must provide a clear title to the property and that all necessary inspections must be completed before the money is released.
Another example could be when a company is acquiring another company. The escrow instructions would outline the conditions that must be met before the assets and money held in escrow are released to the acquiring company. For example, the instructions might say that the acquiring company must receive all necessary regulatory approvals before the assets and money are released.
These examples illustrate how escrow instructions are used to ensure that all parties involved in a transaction are protected and that the assets, documents, and money held in escrow are released only when certain conditions are met.