Escrow Agreements and Trustee Services in Turkey
As Cosar & Akkaya Law we provide legal escrow and trustee services for our clients pursuant to their needs.
Escrow and trustee mechanism is a common practice in transactions aiming to secure the performance of the obligation at a later time if immediate performance is impossible or not preferred. In other words, escrow agreements secure the payments, especially on conditional agreements. This is a practice whereby the obligations of the parties to the underlying agreements in transactions are entrusted with a third party named as the escrow agent as our Law firm in an effort to secure the performance of the obligations.
Escrow agreement was a commonly used mechanism in the USA for a long time and nowadays, this method become one of the most preferred system to secure the payment and also the finds the wider practice area in Turkey as well as the other Countries.
An escrow agreement is based on the main agreement of the transaction. In an escrow agreement, escrow agents also be a part of the agreement along with the parties of main agreement and escrow agents also be bound by the agreement’s terms.
Escrow agreements is not specifically regulated in Turkey. However, pursuant to the freedom of contract principle in the Turkish Law, parties can choose the type, subject and terms and conditions of the agreement freely without breaching imperative provisions of the Law.
Escrow agreements can be complex, however, we believe detailed instructions especially on how and when to distribute the funds is very important.
Escrow agreements must include the following:
- Information on the transaction being the basis for the escrow relationship,
- Detailed information on the assets entrusted with the escrow agent
- Relevant obligations of the escrow agent
- Detailed information under which conditions the assets shall be returned to the parties to the underlying agreement, and about the procedure to be followed upon occurrence of such conditions
- Consequences of the rights and obligations related to the assigned asset during the escrow period
- Terms and conditions for returning the assigned assets in the event where non of the conditions requiring the return thereof has occurred
- Fee payable to the escrow agent
- Information about the applicable law and jurisdiction to be applied to the conflicts likely to arise from the escrow agreement
As Cosar Akkaya Law we guide our clients through what information is required and how detailed to be when completing the documentation properly. Escrow agreements provide important assurances to the involved parties when it is done properly. Contact our team to learn more about escrow agreements and how we can help you and your business on info@cosarakkaya.law.