White SW Computer Law
Intellectual Property, Information Technology & Telecommunications Lawyers
Melbourne Office - PO Box 452, COLLINS STREET WEST Victoria 8007 Australia
Sydney Office - GPO Box 2506, SYDNEY New South Wales 2001 Australia
Telephone: Melbourne Office - +61 3 9629 3709 Sydney Office - +61 2 9233 2600
Facsimile: Melbourne Office - +61 3 9629 3217 Sydney Office - +61 2 9233 3044
Email: wcl@computerlaw.com.au Internet: http://www.computerlaw.com.au

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Escrow Services and Agreements

What is Software Escrow?

Software Escrow is an arrangement whereby the escrow agent stores source code and other material on behalf of two or more parties and releases those materials if certain circumstances arise, such as failure to maintain the software or insolvency.

This provides the necessary protection for the customer who has invested in the software to enable it to continue using same until a replacement can be found (if possible).

It provides the Supplier the security of knowing that the customer does not ordinarily have access to the source code.

Software Escrow can also provide proof of Intellectual Property Ownership and a proof of development history

Who should use escrow services?

Any party who is relying on a supplier to provide ongoing support should use Software Escrow to ensure that support is available in the event of the supplier becoming insolvent or a dispute arising between the supplier and the customer.

Should you have a written agreement in place when using escrow services?

A written agreement is recommended in all cases where Escrow services are used.

The agreement should provide detailed instructions to the Escrow Agent as to what its rights and obligations are in addition to the rights and obligations of each party using the service.

We can customise an escrow agreement to suit your needs.

The escrow agreements which we draft are prepared by lawyers who have IT experience so that technical issues particular to your project can be incorporated without difficulty. White SW Computer Law has served the IT industry for over 20 years.

What issues should be included in an escrow agreement?

Important issues to consider when preparing an Escrow Agreement include:

  • Who are the parties to the Agreement and who are the authorised agents, if any, of these parties?
  • What are the obligations of the Escrow agent with respect to verification of the materials provided for storage?
  • Will materials held by the Escrow agent be updated and/or replaced during the term of the agreement?
  • What is the agreed duration of the agreement and how may the agreement be terminated?
  • Which party is responsible for providing insurance cover for the stored materials?
  • When may the stored materials be accessed and by whom?
  • What will occur in the event that one party disputes the right of the other party to access the materials?
  • What is the agreed storage method?
  • What fees may be charged by the Escrow agent and who is responsible for the payment of these fees?
  • What will occur in the event of a party becoming insolvent?

How can we assist you with your escrow project?

We would be pleased to provide a quote for use by you in preparation of tender documents or other proposals.

It is recommended that a legal agreement be prepared, or you could use one of our standard agreements, to ensure that the rights and obligations of both the customer and the supplier of the storage services be clearly identified to avoid disputes such as unauthorised third parties being allowed access to the stored materials.

Please visit our related firm, Software Escrow & Copyright Agents Pty Ltd for more information about escrow including documentation and verification.

Download our related firm's, standard escrow agreements:

Unlike in the USA, in Australia you cannot register your copyright ownership. A copyright agent offers the service of storing a copy of your copyright work so that in the event of a dispute of copyright ownership, you are able to prove the date when you created the work.

This can be very important in disputes over software development if you have stored copies of your alpha or beta versions of your source code, which can demonstrate your development path or the state of particular data at certain dates. Our clients also include book authors, artists, photographers and other individuals and companies that create artistic works.

If you have any questions regarding our services, please contact our Steve White.

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  This website is a guide only and should not be used as a substitute for proper legal advice.
  Readers should make their own enquiries and seek appropriate legal advice.
  For legal advice please email wcl@computerlaw.com.au