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Escrow Disbursement Agreement Template for United States

A legally binding agreement governed by U.S. federal and state laws that establishes the terms and conditions for the disbursement of funds held in escrow. The agreement specifies the roles and responsibilities of the escrow agent, the conditions for releasing funds, and the rights of all parties involved. It includes provisions for fees, reporting requirements, and compliance with applicable banking and financial regulations.

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What is a Escrow Disbursement Agreement?

The Escrow Disbursement Agreement is essential when parties need a secure third-party mechanism to hold and disburse funds based on specific conditions. This document, subject to U.S. federal and state regulations, outlines the complete framework for managing escrow funds, including deposit requirements, release conditions, and the escrow agent's duties. It's commonly used in real estate transactions, corporate deals, and construction projects where funds need to be held securely until certain conditions are met. The agreement ensures compliance with relevant banking regulations and provides clear guidelines for all parties involved.

What sections should be included in a Escrow Disbursement Agreement?

1. Parties: Identifies all parties to the agreement including the escrow agent, depositor, and beneficiary

2. Background/Recitals: Explains the context and purpose of the escrow arrangement

3. Definitions: Defines key terms used throughout the agreement

4. Appointment of Escrow Agent: Formal appointment and acceptance of the escrow agent's role

5. Deposit of Funds: Details of the escrow deposit and funding mechanisms

6. Disbursement Instructions: Specific conditions and procedures for releasing funds

7. Escrow Agent's Duties: Rights, responsibilities, and limitations of the escrow agent

8. Fees and Expenses: Compensation structure for the escrow agent and allocation of costs

9. Term and Termination: Duration of the agreement and termination provisions

What sections are optional to include in a Escrow Disbursement Agreement?

1. Investment Instructions: Guidelines for investing escrow funds when funds will be held long-term and may be invested

2. Tax Provisions: Treatment of interest and tax reporting obligations when interest will be earned on the escrow funds

3. Dispute Resolution: Procedures for resolving conflicts between parties when specific dispute resolution procedures are needed

4. Force Majeure: Provisions for unforeseen circumstances when extended holding periods are anticipated

What schedules should be included in a Escrow Disbursement Agreement?

1. Schedule A - Wire Transfer Instructions: Detailed banking information for fund transfers

2. Schedule B - Fee Schedule: Detailed breakdown of escrow agent fees and charges

3. Schedule C - Authorized Signatories: List of persons authorized to give instructions

4. Schedule D - Form of Disbursement Request: Template for requesting disbursements from escrow

5. Schedule E - Investment Guidelines: Detailed investment parameters if applicable

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

United States

Publisher

Genie AI

Document Type

Escrow Agreement

Cost

Free to use

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