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Escrow is a legal term which means, "money, goods or a written document, held by a trusted third party, pending the fulfillment of some condition."
Businesses often depend on assets they do not own themselves or legally control such as back-end software packages, accounting and productivity applications, or E-commerce solutions. If the supplier's business fails or alters business practices, escrow services allow your business to access critical assets and continue to conduct business as normal, without disruption.
Lawdit Solicitors offer Escrow services in relation to:
Lawdit provides Escrow services for leading software providers and many household brands. It's specialization in Escrow services is renown in the industry. Lawdit serves clients all around the world. No matter where you are located, Lawdit's team of escrow lawyers and solicitors can assist and advise your company.
Lawdit Solicitors can draft escrow agreements and act as an escrow agent. Lawdit can store material in escrow and advice or and negotiate the terms of escrow agreements drafted by others.
For a deeper understanding of Escrow Agreements, please read: The Importance of an Escrow Agreement
Before we discuss what an Escrow agreement is it is important that we understand what the term 'Escrow' means. 'Escrow' is a legal term which means 'money, goods or a written document, held by a trusted third party, pending the fulfilment of some condition'.
Whilst we all have a software license agreement for the software we use we need some form of software insurance in case things go wrong or certain events take place.
In a typical Software Escrow Agreement the owner ('the Licensor') of the software provides a copy of the database content, website, instructions/ support manuals, other Intellectual Property ('IP'), source code (instructions/ statements written in eye-readable form in programmer's language and capable of being compiled into object code and an object code being a computer code that a computer can understand) to an escrow agent (a trusted third party, 'Third Party'). The source code is the formula of any software programme.
The escrow agreement sets outs certain events under which the above can be released to a licensed user of the software ('the Licensee'). For example if the Licensor goes into bankruptcy or liquidation, a merger or acquisition takes place, or fails to properly maintain the software or perform under the License Agreement.
In today's day and age and due to the technological advancements in the IT industry more and more businesses are reliant upon third parties to supply bespoke software for their needs and to provide a maintenance service for the same. Such an agreement is therefore essential in order to protect the Licensee from such a risk. This can obviously assist the Licensor in marketing his product better.
Placing the source in Escrow will help market the software and a Licensors' services better. The Licensee will gain confidence in the business and will feel safe in the knowledge that if one of the events discussed above occurs then he will be safe. The Licensee will be able to take the source code to any other software designer/ programmers and with this code they will be able to add and amend, fix, any issues and essentially have the Licensee up and running in little time, therefore ensuring continuity of business.
Having said that software developers take pride in their ingenious work and invest a great deal in order to design something bespoke for a client and to gain the competitive edge of others in their field/ industry. It is therefore understandable that they will be reluctant to release the source code to a Licensee.
If you are involved in the development/ licensing or simply use of software or other bespoke technology then you would need the protection afforded by the use of such an escrow agreement. A Licensee should evaluate how critical the software, programme etc is to his business to put into context the importance of this agreement.
Lawdit's typical clients that would want to utilise this escrow agreement service would include web designers and creatives, database administrators, software programmers etc. These clients are typically coming up with new ideas and they will want a way in which they can safely deposit and archive their work. Depositing their work with Lawdit will assist in the event that there is some copyright or ownership dispute.
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