Imagine you’re purchasing custom furniture from an online seller. The seller agrees to craft and deliver a custom-made dining table within 30 days. You both decide to use an escrow service to protect your transaction.
Escrow Duration Example:
- Escrow Agreement Date: September 1st
- Escrow Duration: 45 days (from September 1st to October 15th)
This 45-day period is the total time the escrow will remain active. It includes the entire process from when the payment is made and the agreement is accepted until the funds are either released to the seller or returned to you, the buyer, if any issues arise.
Estimated Time of Delivery Example:
- Delivery Timeframe: 30 days (from September 1st to September 30th)
This 30-day period is when the seller is expected to complete the custom dining table and deliver it to you. The delivery must happen within these 30 days, well within the 45-day escrow duration.
How They Work Together:
- If the seller delivers the table by September 30th, as agreed, you have 15 additional days within the escrow period (until October 15th) to inspect the table and confirm that it meets your expectations.
- If you’re satisfied, the funds are released to the seller.
- If there’s a problem with the table or it’s not delivered by September 30th, you can initiate a dispute within the escrow system, knowing that there’s still time within the escrow duration to resolve the issue.
Why This Matters:
- Protection and Assurance: Because the delivery time is within the escrow duration, you, as the buyer, are protected. If the table isn’t delivered on time or doesn’t meet the agreed specifications, the funds won’t be released until the issue is resolved.
- Resolution of Disputes: Any disputes about the delivery can be handled within the active escrow period, utilizing the escrow service’s dispute resolution mechanisms.
- Release of Funds: The seller knows that once they deliver the table and you confirm everything is satisfactory, they’ll receive the payment promptly, giving both parties clear expectations and security.