Escrow instructions are contracts. Draft them like one.

Most escrow disputes we are retained on trace back to a single ambiguous line — a defined term used loosely, a condition precedent that was never actually made a condition, a release date left to context instead of a calendar. The instructions themselves are rarely the problem. The drafting is.

An escrow instruction is a contract between the parties and the escrow holder, and it should be drafted with the same discipline as any other contract: defined terms, unambiguous conditions, and a mechanism for what happens when the parties disagree. Too often it is treated as a form to fill in rather than an instrument to negotiate.

Write conditions as facts, not intentions

"Upon satisfactory completion of due diligence" is not a condition — it is an invitation to argue about what satisfactory means. A condition precedent should be drafted as a fact a third party could verify without asking either side: a recorded document, a dated certificate, a wire confirmation number. If the escrow holder has to exercise judgment to release funds, the instruction has failed at its one job.

"An escrow instruction is not a summary of the deal. It is the only part of the deal the escrow holder is allowed to read."

We draft every set of instructions assuming the escrow holder will never see the underlying purchase agreement, because in practice they usually do not. Every term the instruction relies on has to be self-contained — defined in the instruction itself, not incorporated by a reference the escrow officer has no reason to chase down.

Build the dispute mechanism before you need it

The clause nobody wants to negotiate is the one that matters most: what happens when the parties disagree about whether a condition has been met. A well-drafted instruction names a specific dispute path — joint written direction, interpleader, or a named arbitrator — before a single dollar is at risk. Leaving it silent does not avoid the fight; it just moves the fight to whichever court has jurisdiction, on whoever's timeline that turns out to be.