- The amount of the escrow, which can be further broken down based on the type of claim asserted (for example, the inability to settle an outstanding litigation may allow Buyer to use a defined amount of the escrowed funds to settle the claim).
- The time period for holding the funds in escrow, and even the time period by which certain types of claims must be asserted before they are deemed waived.
- The actual procedure for the Buyer to assert a claim, the notice required to the Seller, and the right of the Seller to dispute the claim.
- How disputes are to be resolved, which can include referral to a mediator or arbitration.
- When the escrow agent is permitted to release all or a portion of the funds to seller or buyer, as applicable.
Both the Buyer and Seller need to pay particular attention as to how post-closing claims are to be handled under the terms of the purchase agreement. The parties need to set forth clearly what claims can give rise to an obligation on the part of the Seller post-closing and the mechanism for the enforcement of those claims. The escrow of a portion of the purchase price is a common tool for addressing these issues, but the parties must make sure the purchase agreement clearly spells out when the Buyer can assert a claim against the escrowed funds and the procedures for making post-closing claims.