Depository Agreement Sample Clauses

A Depository Agreement is a contractual provision that establishes the terms under which a third-party depository holds assets, documents, or funds on behalf of the parties involved in a transaction. Typically, this clause outlines the responsibilities of the depository, the conditions for release or transfer of the held items, and the rights of each party to access or claim the assets. For example, in a real estate transaction, the depository might hold earnest money until closing conditions are met. The core function of this clause is to provide security and neutrality, ensuring that assets are safeguarded and only released according to agreed-upon terms, thereby reducing risk and fostering trust between parties.