Every gold and precious metals transaction has the same tension. The buyer does not want to pay until the metal is delivered and tested. The seller does not want to ship until payment is certain. Attorney escrow lets the buyer's money sit in a neutral, regulated place, a law firm's client trust account, until the agreed conditions are met.
A typical structure
- Contract. Buyer and seller sign a purchase agreement covering quantity, fineness, form (bars, dore, coins), price basis, delivery point, assay method and timing.
- Verification. The attorney verifies the identity of the parties, the companies behind them and the source of the buyer's funds, and screens everyone against sanctions lists.
- Escrow agreement. The parties sign an agreement stating exactly what releases the money: for example, an assay report from a named refinery or laboratory showing the agreed fineness and weight, plus delivery to a named vault.
- Deposit. The buyer wires the purchase price from its own bank account to the trust account, after confirming the wire details by telephone.
- Delivery and assay. The metal moves to the agreed location and is tested.
- Release. When the documents required by the agreement are received, the attorney pays the seller and any agreed commissions. If the conditions are not met by the deadline, the funds go back to the buyer's account.
Writing good release conditions
The release condition should rely on documents from independent sources, not on the seller's own word. Useful examples include an assay certificate from a named refinery, a vault receipt, warehouse warrant or bill of lading, and customs export or import papers where relevant. Name the issuer, the document and the deadline. See writing clear release conditions for more.
Price and weight adjustments
Gold is often priced against a market fix, with a discount, and the final weight is known only after refining. The agreement should say how the final price is calculated and what happens to any difference: whether it is paid to the seller, refunded to the buyer, or both.
What the attorney does not do
The attorney does not test, store or ship metal, does not value it, and does not guarantee that the seller will perform. The role is to hold and pay money as the signed agreement says. Physical handling belongs with refiners, vaults and logistics companies.
Common risks
- Sellers who cannot show a lawful chain of custody or export documents.
- Requests for advance "fees" before any metal moves.
- Documents that cannot be confirmed directly with the issuer.
Learn more on our gold and precious metals page, or contact the attorney to discuss a purchase.