Escrow Agreements (Ascrow) as the Basis for a New Complex Obligation

Abstract

The paper is devoted to the scientific and practical apprehension of implementation of a new contractual design substantiating a complex obligation, namely, an escrow agreement, and its separation from similar civil law designs (such as escrow account, nominal account, storage, letter of credit, depositing of funds and securities to the notary public, etc.). Prior to introducing the escrow agreement, its existence in the property turnover was actually enforced by the escrow account rules introduced into civil law during the reform of the law of obligations. There is a close legal relationship between the escrow agreement (escrow) and the escrow account arising from the “contingency” of the obligation in question, but civilistic institutions under consideration are not identical. Its independence from the banking sector is considered to be an absolute advantage of the escrow agreement, as opposed to both the escrow account and the other securing financial mechanisms (such as a letter of credit, a safe deposit box lease agreement, etc.) in which the leading role belongs to banking organizations that are suffering crisis situations at the present stage of the existence of the Russian banking system. The United States are the ancestral home of the legal relations of obligations constructed in compliance with the model of the escrow agreement. Probably, this explains the term “escrow” that is absolutely strange for the Russian legal terminological framework and that is a synonym for the escrow agreement. Attention is drawn to the implementation of this contractual design for the needs of electronic business in the conditions of large-scale digitalization of the Russian legal and economic systems. The author concludes that the escrow agreement is able to organically fit into a number of new regulatory instruments of the law of obligations aimed at creating an attractive investment legal and economic environment in the Russian Federation.