Protect Your Rights With Software Escrow!
Michalis "BIG Mike" Kotzakolios
Kotzakoliou, SSA

In this article, we’re going to discuss the basics and the merits of software escrow. It’s not for everyone, to be honest. There are certain conditions that should be met before software escrow can be considered. Let’s summarize them.

The Situation: You are a very enterprising person, beaming with so many ideas that could possibly catapult your industry to the next level. You have envisioned so many software applications that you know will greatly benefit a lot of people.

The Problem: You don’t know a dime about programming.

The Solution: Outsourcing. You could always hire a freelancer to come up with a software program that would make your specifications a reality.

The Dangers: Most of the time, you’ll be dealing with strangers. As such, you’ll be susceptible to many perils. The freelancer might claim royalties for creating the software, despite previous agreements to the contrary. Worse, he may even claim sole proprietorship over the product.

The Guarantee: Software escrow. Software escrow is a document held in trust by a third party. Upon that third party devolves the duty to make sure that both primary parties comply with the terms of their agreement, as delineated in the software escrow.

Immediately, you’d see that software escrow greatly benefits those businessmen who outsource product creation. It is a guarantee that their rights would be protected and observed. After all, the software escrow shall be held by an objective third party who is duty bound to ensure that the businessman as well as the freelancer would faithfully respect the terms of their agreement.br>
Often, safety escrow also comes with the payment. The third party would hold on to the payment, and would only release the same once both primary parties would agree to close their deal. If the businessman would find the deliverable unsatisfactory, the third party would determine if such is based on reasonable grounds. If it appears that the freelancer has complied with the terms of the agreement, payment would be released to him.

There are many software escrow services plying their trade in the market, most especially over the Internet where the circumstances of anonymity further compound the perils of contract disputes. These software escrow services earn their keeps by acquiring stated percentages from the payment they will hold in trust, which is quite frankly, a fair trade for the work they will provide.

Is a software escrow agreement worth it, you might ask? If you’re a businessman who has developed an excellent working relationship with the freelancer, there is probably no need for software escrow. Otherwise, the businessman would be in a better position to protect his interests with a software escrow agreement.