Escrow agent as a party to an agreement of escrow account (escrow)

Abstract

The article deals with the legal status of an escrow agent as a party to the escrow account contract in Ukraine and some European countries, in particular, Switzerland, Germany and France. It was found out that the escrow agent takes a central place in the legal relationship, acting as an "intermediary" between the parties, a neutral, independent representative of the depositor and the beneficiary. The escrow agent is a person who controls and guarantees the fulfillment of obligations by other parties to the contract, ensuring the conditions for its fulfillment - the storage of funds or valuables transferred by the parties until the occurrence of the event specified in the escrow contract.The general legal nature of the escrow agent status is analyzed based on the US case law. An important peculiarity of escrow legal relations is the occurrence of «dual agency» relations, since the escrow agent simultaneously acts as an agent for two principals - the depositor and the beneficiary. The peculiarities of the range of subjects that can be escrow agents in European countries and in Ukraine were studied. It was found out that in European countries  the range of potential escrow agents is wide and includes notaries, banks, specialized commercial organizations, lawyers, law firms, auditors, or, in some cases, any competent person chosen by the parties. In Ukraine, the very concept of «escrow agent» does not appear in the legislation, and its functions are performed only by a bank, whose rights and obligations are regulated by the Civil Code of Ukraine. The contradictory approaches of scientists to the issue of the moment of ownership to the subject of fiduciary transfer in France were studied. It was concluded that the fiduciary, who does not have all the rights to the thing and whose activities are controlled by both the beneficiary and the depositor, cannot be considered its owner. The rights and obligations of the bank as an escrow agent under the Civil Code of Ukraine were clarified.