IS THE CONDITIONED DEPOSITING (ESCROW) CONTRACT FIDUCIARY?

Abstract

Annotation: the article is devoted to the debatable question of whether or not a conditioned depositing contract (escrow) is a fiduciary deal. It is concluded that the absence of a uniform scientific understanding of the concept and mandatory features of fiduciary nature of the deals causes difficulties with qualifying escrow contracts as fiduciary. Only those contracts can be recognized as fiduciary in which a fiduciary debtor has a legally significant discretion in performing his obligations with respect to property or interests of the counterparty. According to the general rule, such relations do not result from the conclusion of a conditioned depositing contract. In case the escrow agent is given the authority to use and dispose of the property transferred to him in escrow, the escrow agent may have fiduciary duties.

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