Escrow arrangement

Definizione

An escrow arrangement places assets such as funds, deeds or software source code with an independent escrow agent, who releases them only when defined conditions are met. In software contracts a source-code escrow protects the licensee by allowing release if the supplier goes bankrupt or fails to maintain the software. The release triggers, verification and continuation rights must be set out clearly in the escrow agreement.

Esempio

A SaaS contract includes a source-code escrow released to the customer if the vendor enters bankruptcy.

Perché rappresenta un rischio aziendale

An escrow arrangement that is not kept up to date provides false security. Source code deposited once and never updated becomes worthless as the software evolves. Release triggers that are poorly defined can block the licensee from accessing the code precisely when it needs it. For financial escrow, an agent with inadequate safeguarding arrangements or unclear release conditions creates execution risk at the moment of the triggering event.

Come gestirlo

• Define the release triggers precisely: bankruptcy, insolvency event, material breach of maintenance obligations or cessation of the product.
• For source-code escrow, require the vendor to update the deposited materials on each material release and to verify the deposit annually.
• Choose an established escrow agent with a clear safeguarding structure and defined liability for the deposited assets.
• Specify verification rights: the licensee or an independent expert should be able to test that the deposited code compiles and matches the production system.
• Track the escrow deposit update obligations and annual verification dates alongside the main software contract renewals.

Riferimenti normativi

• BW 7:600 Dutch Civil Code: safekeeping Diritto olandese

Salvo diversa indicazione, i riferimenti riguardano il diritto olandese (Burgerlijk Wetboek, il Codice Civile olandese); gli strumenti UE come il GDPR si applicano in tutta l'UE. Si tratta di informazioni generali, non di consulenza legale. Altre giurisdizioni trattano questi concetti in modo diverso. Verifichi il testo vigente e la propria situazione con un avvocato qualificato.