Release conditions
The release conditions are the core of the escrow agreement. They determine in which situations Softcrow releases the deposit to the beneficiary. The more concrete the conditions, the less room there is for interpretation and the more smoothly the release process runs at the moment it really matters.
What makes a release condition good?
A good release condition describes a situation that can be established objectively. Softcrow checks whether the situation matches what is set out in the agreement, on the basis of documentation, public sources or email correspondence between the parties. A judgement on the conduct or intent of a party is not part of that check.
The question to answer is: if the parties disagree about the alleged shortcoming, can a neutral party establish, on the basis of the circumstances, that the situation has occurred?
Workable versus vague conditions
| Condition | Verifiable | Explanation |
|---|---|---|
| Supplier is declared bankrupt | Yes | Public, unambiguous, directly verifiable |
| Supplier ceases its business activities without having transferred its obligations towards the Beneficiary to a party acceptable to the Beneficiary | Yes | Deregistration from the Chamber of Commerce, notice from the supplier or from the acquiring party |
| Supplier fails to meet (an) important obligation(s) under the Agreement | No | Not objectively verifiable; dispute resolution via SGOA |
| Supplier will no longer provide Maintenance for the Software as used by the Beneficiary | Yes | Notice from the supplier |
| Supplier fails to meet its obligation | No | Not objectively verifiable; dispute resolution via SGOA |
| Supplier and/or software are acquired by a party that does not fully honour the agreement(s) necessary for continued and undisturbed use of the software | No | Not objectively verifiable; dispute resolution via SGOA |
Why arrange this well in advance
If release conditions are vaguely worded, a request can be contested. In that case Softcrow takes no position. Softcrow is neutral and does not release as long as the situation is not demonstrably established. The parties are then left to mutual consultation or formal dispute resolution. That is a process you would rather avoid.
Well-worded conditions make Softcrow’s check straightforward and undisputed, and the release, if it is ever needed, fast and smooth.