Escrow agreement and trustee services are not designated under Turkish law. In order to fill this huge gap under our law system, one shall work with a company holding an international trustee certificate.
However, it is better to explain the terms of such agreement.
Accordingly, in line with the agreement that is concluded between the buyer and the seller, one of the parties has the obligation to perform and the other party has the obligation to pay for such performance. Since the payment is generally the risky part, the payment is transferred to the account of the escrow agent that is defined as the neutral third party designated in the escrow agreement. Once the performance is executed, the payment is made, in line with the pre-agreed terms, by the escrow agent to the performer party.
Thus, the buyer party eliminates the risk of non-performance and the seller party eliminates the risk of non-payment.
At this point, we shall explain the duties of the escrow agent determined in the escrow agreement;
- Act as a neutral third party to hold assets for an agreed time period
- Safeguard assets on behalf of the contracting parties in order to mitigate counterparty risk
- Hold cash and/or security assets in accordance with the contractual agreements
- Release assets / disburse cash pursuant to the pre-agreed release instructions in the contract.
Even though escrow agreement and trustee services are not designated under Turkish law, we, attorneys at law working at Barlas Law Firm, hold the international certificate required to provide escrow services both in local and international levels.
