Contract Glossary
Escrow
Definition
Escrow is when a neutral third party holds your money, documents, or assets until everyone does what they promised. Nobody gets the goods until the conditions are met. It's the trust layer between two parties who don't fully trust each other.
In Practice
You hire a freelance developer for a $15,000 website build. Instead of paying everything upfront (risky for you) or paying nothing until delivery (risky for them), you deposit $15,000 into an escrow account. As the developer hits milestones, wireframes approved, homepage built, full site tested, funds are released in chunks: $5,000, $5,000, $5,000. The developer knows the money exists. You know it won't be released until the work is done.
Common in these contract types
Related contract clauses
Frequently asked questions
Create a contract with proper escrow clauses
Generate a professional contract in minutes with all the essential clauses -- no legal expertise needed.
Create your contractThis content is for informational purposes only and does not constitute legal advice.