Software Escrow

Software Escrow means deposit of the software’s source code into an account held by a third party escrow agent. Escrow is typically requested by the party licensing the software (the “licensee”), to ensure maintenance of the software. Basically, Software Escrow companies are a go between for businesses that use custom made Software and the Software Developing company that made that Software. The software source code is released to the licensee if the licensor files for bankruptcy or otherwise fails to maintain and update the software as promised in the software license agreement.

The software escrow agreement is a three party contract that governs the procedures and terms of the escrow process between the licensor, licensee and agent. Usually, the software license agreement will contain a clause that states that the parties agree to escrow and will execute a separate agreement to cover those terms.