1. Law - deeds.
A deed that has been delivered, but that is not to become operative until a future date, or until a specified condition has been fulfilled.
2. Contract law.
Funds or documents in escrow are held by a trusted independent third party, to be released only on the fulfilment of prespecified conditions.
- ISDA Master Agreements - other provisions
- "... extra provision required by the parties... may include:
- escrow provisions to address potential problems arising from time differences between the places to which each party makes payments (i.e. one party could make a payment at the time it is obliged to do so in the relevant time zone but then fail to receive payment due to it from the other party); in this situation provision can be made for a third party to hold payments “in escrow” and only release a payment when it has received the corresponding payment from the other party."
- The Treasurer's Wiki - Derivatives documentation