Before we discuss what an Escrow agreement is it is important that we understand what the term 'Escrow' means. 'Escrow' is a legal term which means 'money, goods or a written document, held by a trusted third party, pending the fulfilment of some condition'.Whilst we all have a software license agreement for the software we use we need some form of software insurance in case things go wrong or certain events take place.
In a typical Software Escrow Agreement the owner ('the Licensor') of the software provides a copy of the database content, website, instructions/ support manuals, other Intellectual Property('IP'), source code (instructions/ statements written in eye-readable form in programmer's language and capable of being compiled into object code and an object code being a computer code that a computer can understand) to an escrow agent (a trusted third party, 'Third Party'). The source code is the formula of any software programme.
The escrow agreement sets outs certain events under which the above can be released to a licensed user of the software ('the Licensee'). For example if the Licensor goes into bankruptcy or liquidation, a merger or acquisition takes place, or fails to properly maintain the software or perform under the License Agreement.
In today's day and age and due to the technological advancements in the IT industry more and more businesses are reliant upon third parties to supply bespoke software for their needs and to provide a maintenance service for the same. Such an agreement is therefore essential in order to protect the Licensee from such a risk. This can obviously assist the Licensor in marketing his product better.
In a typical Software Escrow Agreement the owner ('the Licensor') of the software provides a copy of the database content, website, instructions/ support manuals, other Intellectual Property('IP'), source code (instructions/ statements written in eye-readable form in programmer's language and capable of being compiled into object code and an object code being a computer code that a computer can understand) to an escrow agent (a trusted third party, 'Third Party'). The source code is the formula of any software programme.
The escrow agreement sets outs certain events under which the above can be released to a licensed user of the software ('the Licensee'). For example if the Licensor goes into bankruptcy or liquidation, a merger or acquisition takes place, or fails to properly maintain the software or perform under the License Agreement.
In today's day and age and due to the technological advancements in the IT industry more and more businesses are reliant upon third parties to supply bespoke software for their needs and to provide a maintenance service for the same. Such an agreement is therefore essential in order to protect the Licensee from such a risk. This can obviously assist the Licensor in marketing his product better.
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