Escrow protects your deposit until the work is approved.
Escrow is a neutral holding place where we put money aside until the project, or piece of the project, is done. The funds stay there until your freelancer or agency fulfills their obligations and you say you are satisfied those obligations are met and release them.
On Tuuko, you deposit the funds for fixed-price jobs into escrow (one contract, or milestone, at a time) and release them to your freelancer or agency once you’ve received and reviewed the agreed upon work. The freelancer or agency can see you are willing and able to pay as promised, while you know you don’t have to give them the money until you are satisfied with the work.
Your initial deposit at hiring can be for the full contract amount or the first milestone. You can then add and fund additional milestones as agreed with the freelancer or agency throughout the contract. If you ever release less than the agreed milestone amount, the extra funds in escrow will roll forward to the next milestone. The funds stay in escrow until the agreed upon work is completed.
If you fail to respond to a submission within 7 days, the escrowed funds are automatically released to your freelancer or agency as your failure to respond is deemed approval. Therefore, it is important to mark Request Changes on the contract in Tuuko or workstream communication if you would like your freelancer or agency to edit their submitted work.
How It Works
If a Client and a Freelancer enter into a Fixed-Price Contract, these Fixed-Price Escrow Instructions (“Escrow Instructions”) apply. These Escrow Instructions govern Fixed Price Escrow Accounts. If you have a Fixed-Price Contract and wish to make or receive a miscellaneous or bonus payment, those activities are governed by the Hourly, Bonus, and Expense Payment Agreement with Escrow Instructions.
To the extent permitted by applicable law, we may modify these Escrow Instructions without prior notice to you, and any revisions to these Escrow Instructions will take effect when posted on the Site unless otherwise stated. Please check the Site often for updates.
These Escrow Instructions hereby incorporate by reference the Terms of Service (“Terms of Service”). Capitalized terms not defined in these Escrow Instructions are defined in the User Agreement, elsewhere in the Terms of Service, or have the meanings given such terms on the Site.
1. DIGITAL SIGNATURE
By clicking to fund Escrow (a “Funding Approval”) or to accept a Fixed-Price Contract, Client and Freelancer are deemed to have executed these Escrow Instructions electronically, effective on the date Freelancer clicks to accept the engagement. Doing so constitutes an acknowledgement that you are able to electronically receive, download, and print these Escrow Instructions. All references to the Escrow in these Escrow Instructions will include the initial Funding Approval and any additional Funding Approval for a Fixed-Price Contract.
2. RELEASE AND DELIVERY OF AMOUNTS IN ESCROW
Client and Freelancer irrevocably authorize and instruct Tuuko Escrow Inc. (“Tuuko Escrow “) to release applicable portions of the Fixed Price Escrow Account (each portion, a “Release”) to their Freelancer Escrow Account or Client Escrow Account, as applicable, upon the occurrence of and in accordance with one or more Release Conditions provided below or as otherwise required by applicable law or the Terms of Service. The amount of the Release will be delivered to the applicable Escrow Account in accordance with Freelancer’s or Client’s instructions, as applicable, these Escrow Instructions, and the other Terms of Service.
2.1 RELEASE CONDITIONS
As used in these Escrow Instructions, “Release Condition” means any of the following:
1. Client clicks to release funds to Freelancer.
2. Client does not take any action for 7 days from the date of a Freelancer’s Release request, in which case Freelancer and Client agree that Tuuko Escrow is authorized and irrevocably instructed to immediately release to Freelancer the amount associated with to the applicable milestone in connection with such Release request.
3. Freelancer cancels the contract before a milestone payment has been released to Freelancer, in which case the funds are to be returned to the Client.
4. Client and Freelancer have submitted joint written instructions for a Release to either Freelancer Escrow Account or Client Escrow Account, as applicable.
5. Client and Freelancer agree to close the contract without release of funds, in which case the funds are to be returned to the Client.
6. Client or Freelancer has failed to make its Arbitration payment or paid its fair share of the Arbitration costs pursuant to the Dispute Assistance Program, in which case the funds are released to the Party that has made its Arbitration Payment.
7. Both Client and Freelancer have failed to timely submit to Arbitration for an unresolved Dispute as such term is defined in the Dispute Assistance Program, in which case the funds are released to the Client.
8. Client or Freelancer has failed timely to respond to a Tuuko Dispute Assistance notification as required by the Dispute Assistance Program, in which case the funds are released to the User that has participated.
9. Client or Freelancer otherwise has failed to comply with the Dispute Assistance Program, in which case the funds are to be released to the User that has complied with the Dispute Assistance Program.
10. Submittal of a final award of an arbitrator appointed pursuant to the Dispute Assistance Program, in which case the funds will be released in accordance with such award.
11. Issuance of the final order of a court of competent jurisdiction from which appeal is not taken, in which case the funds will be released in accordance with such order.
12. We believe, in our sole discretion, that fraud, an illegal act, or a violation of Tuuko’s Terms of Service has been committed or is being committed or attempted, in which case Client and Freelancer irrevocably authorize and instruct Tuuko Escrow to take such actions as we deem appropriate in our sole discretion and in accordance with applicable law, in order to prevent or remedy such acts, including without limitation to return the funds associated with such acts to their source of payment.
3. INSTRUCTIONS IRREVOCABLE
On the occurrence of a Release Condition, Client and Freelancer are deemed to and hereby agree that the instruction to Tuuko Escrow and its wholly owned subsidiaries to release funds is irrevocable. Without limiting the foregoing, Client’s instruction to Tuuko Escrow and its wholly owned subsidiaries to pay a Freelancer is irrevocable. Such instruction is Client’s authorization to transfer funds to Freelancer from the Client Escrow Account or authorization to charge Client’s Payment Method. Such instruction is also Client’s representation that Client has received, inspected and accepted the subject work or expense. Client acknowledges and agrees that upon receipt of Client’s instruction to pay Freelancer, Tuuko Escrow will transfer funds to the Freelancer and that Tuuko, Tuuko Escrow, and other Affiliates have no responsibility to and may not be able to recover such funds. Therefore, and in consideration of services described in this Agreement, Client agrees that once Tuuko Escrow or its subsidiary has charged Client’s Payment Method, the charge is non-refundable.
4. DORMANT ENGAGEMENTS
To be fair to Clients and Freelancers, Tuuko has a procedure for Fixed-Price Contracts that appear Dormant (as defined below). For purposes of determining Dormant status, “activity” means business term or milestone updates or requests, Fixed-Price Escrow Funding, Fixed-Price Escrow Release, Fixed-Price Escrow Refunds, Funding requests, Release requests, requests to close the Fixed- Price Contract, Status Report submittals, or actions under the Fixed Price Dispute Assistance Program.
A “Dormant Engagement” is a Fixed-Price Contract that has a Fixed-Price Escrow Account with a balance but has had no activity for 60 consecutive days after the last milestone date contained in the business terms. Dormant Engagements are subject to the following rules:
1. Tuuko will notify Client when the Fixed-Price Contract becomes Dormant (“Dormant Date”).
2. If no activity other than Release requests has occurred within 7 days after the Dormant Date, Tuuko will notify the Freelancer that the Fixed-Price Contract is Dormant.
3. If neither Freelancer nor Client take any action for 7 days after the Dormant Date, Freelancer and Client agree that Tuuko Escrow is authorized and irrevocably instructed to immediately release escrow funds to Client.
4. If Freelancer submits a Release request and client does not take any action for 7 days from the date of the Release request, Freelancer and Client agree that Tuuko Escrow is authorized and irrevocably instructed to immediately release to Freelancer the amount related to the milestone with Release request.
5. All funds released to Freelancer under this Section, Dormant Engagements, will be subject to the applicable Service Fees.
5. REFUNDS AND CANCELLATIONS
Client and Freelancer are encouraged to come to a mutual agreement if refunds or cancellations are necessary. If there are no funds in escrow, Client or Freelancer can cancel the contract at any time by clicking to close the contract. If funds are held in escrow, refunds and cancellations must be initiated by Client or Freelancer by following the steps below.
5.1 CANCELLATION BY FREELANCER
If Freelancer wants to cancel a contract with funds held in escrow, Freelancer must click to close the contract. When Freelancer clicks to close the contract, Freelancer and Client agree that Tuuko Escrow is authorized and irrevocably instructed to immediately release to Client all Escrow funds associated with the contract.
5.2 CANCELLATION BY CLIENT
If Client wants to cancel a contract with funds held in escrow, Client must click to close the contract. Freelancer must either click to approve or dispute the Client’s cancellation within 3 days. If Freelancer approves the cancellation, Freelancer and Client agree that Tuuko Escrow is authorized and irrevocably instructed to immediately release to Client all escrow funds associated with the contract. If Freelancer takes no action within 3 days from the date notification of the cancellation is sent to Freelancer, Freelancer and Client agree that Tuuko Escrow is authorized and irrevocably instructed to immediately release to Client all Escrow funds associated with the contract. If Freelancer disputes the cancellation, Freelancer and Client will be offered Tuuko Dispute Assistance (as defined in Section 6).
6. DISPUTE ASSISTANCE PROGRAM
If Client and Freelancer fail to come to a mutual resolution by way of the Refund and Cancellation process as stated in Section 5, Tuuko provides this Dispute Assistance Program as a mechanism to resolve the Dispute.
6.1 DEFINITIONS AND KEY DATES
1. “Arbitration” means binding non-appearance based Arbitration by a neutral third party as described in Section 6.
2. “Arbitration Payment” means Client’s or Freelancer’s applicable portion of the costs of Arbitration as more particularly described in this Section 6.
3. “Arbitration Limitations Date” means the date 30 days after the date a Dispute is filed via the Site or via customer Relations ticket with Tuuko.
4. “Workstream communication” means the contract room on the Site for the particular Fixed-Price Contract, including the contract terms, messages and files, and milestones and payments.
5. “Dispute” means a dispute between a Client and Freelancer concerning a Fixed-Price Contract and covered by this Dispute Assistance Program.
6. “Dispute Assistance Deadline” means the date 30 days after the Client was billed for the last milestone.
7. “Dispute Assistance Program” means the Dispute assistance program set forth in this Section 6.
8. “Tuuko Dispute Assistance” means the Dispute assistance provided by Tuuko as set forth in this Section 6.
6.2 AVAILABILITY OF TUUKO DISPUTE ASSISTANCE
Dispute Assistance is only available; (i) after initial funding of the Fixed Price Escrow Account associated with the Fixed-Price Contract, and (ii) prior to the Dispute Assistance Deadline. Dispute Assistance is not available to either the Freelancer or the Client via the Site after the Dispute Assistance Deadline.
6.3 NON-BINDING ASSISTANCE
Tuuko will first attempt to assist Client and Freelancer by reviewing the Dispute and proposing a mutual, non-binding resolution.
The Tuuko Disputes team will notify Client and Freelancer via ticket by providing a notice of dispute along with a request for information and supporting documentation (if any).
If both Client and Freelancer respond to the notice and request for information, then the Disputes team will review the documentation submitted and any information available on the Site that pertains to the Dispute. After review, the Disputes team will propose a mutual, non-binding resolution based on the results of the review.
The proposed resolution is non-binding; Client and Freelancer can choose whether or not to agree to it. If Client and Freelancer agree in writing to the proposed resolution, Client and Freelancer agree that Tuuko Escrow is authorized and irrevocably instructed to immediately release Escrow funds in accordance with the proposed resolution.
If Client or Freelancer rejects Tuuko’s proposed, non-binding resolution, they may proceed to Arbitration. If Client and Freelancer do not choose to arbitrate, Freelancer and Client agree that Tuuko Escrow is authorized and irrevocably instructed to immediately release to Client all funds held in Escrow.
If Client or Freelancer chooses to arbitrate by notifying Tuuko via support ticket of their intent to arbitrate, Tuuko will notify both Client and Freelancer via ticket that they must make the Arbitration Payment within 5 business days of the notice (the “First Arbitration Notice“). If both parties make the Arbitration Payment (including after initial notice of non-payment), then Tuuko will deliver instructions for initiating Arbitration.
If Client or Freelancer does not make the Arbitration Payment within 5 business days of the First Arbitration Notice, Freelancer and Client will be deemed to have irrevocably authorized and instructed Tuuko Escrow to, and Tuuko Escrow will, release the disputed funds to the party that paid the Arbitration Payment to the extent that any disputed funds remain in the Escrow Account. If no funds remain in the Escrow, Tuuko will close the Dispute.
If Client and Freelancer both do not make the Arbitration Payment by the Arbitration Limitations Date, then Client and Freelancer will be deemed to have authorized and instructed Tuuko Escrow to, and Tuuko Escrow will, release the disputed funds to Client, to the extent that any disputed funds remain in the Escrow Account, if no funds remain Tuuko will close the Dispute.
6.4 ARBITRATION FOR A FIXED-PRICE CONTRACT
Except for Fixed-Price Contracts where the Client is an Enterprise, Freelancer and Client each has the right to demand Arbitration of a Fixed-Price Contract before the Arbitration Limitations Date if the Fixed-Price Escrow associated with the Fixed-Price Contract has been funded at least once. If either Client or Freelancer demands Arbitration in accordance with these Escrow Instructions and you are not the party that requested Arbitration, you agree to submit to the Arbitration and pay your share of the Arbitration fees detailed below. In any Arbitration, each of you and the other Member is a “Dispute Party,” and collectively you are the “Dispute Parties.”
Any such Arbitration will be conducted by a neutral third-party Arbitration service: The International Centre for Arbitration & Mediation in Kampala (ICAMEK)*. The Arbitration rules and fees for each are set out in Appendix A to these Escrow Instructions. By default, Arbitration will be conducted by ICAMEK unless Tuuko chooses another Arbitration service.
6.5 FILING THE CASE WITH THE ARBITRATOR
When a User Demands Arbitration (the “Arbitration Plaintiff”), or when the circumstances dictate that Tuuko notify a User of its right to file for Arbitration as described above, Tuuko will provide the User with instructions on initiating the Arbitration. After the parties have initiated the Arbitration, Tuuko will provide the arbitrator with supporting documentation including but not limited to the documents submitted to Tuuko during the dispute resolution process, information available via the Site, and access to the Site.
If the Arbitration Plaintiff makes the Arbitration Payment, Tuuko will contact the other party (“Arbitration Respondent”) to request that the Arbitration Respondent pay its portion of the Arbitration fees as well. If the Arbitration Respondent fails to make the Arbitration Payment and submit to such Arbitration within 5 business days after the First Arbitration Notice, Tuuko will suspend the Arbitration Respondent’s account, and both parties will be deemed to have irrevocably authorized and instructed Tuuko Escrow to, and Tuuko Escrow will, release the funds sought by the Arbitration Plaintiff in the demand for Arbitration to the Arbitration Plaintiff, to the extent such funds remain in the Fixed-Price Escrow Account. If no funds remain in the Fixed-Price Escrow Account, Tuuko will close the Dispute.
If both parties pay their portion of the Arbitration fees, Tuuko will instruct the parties on the process for initiating the Arbitration with the Arbitration service provider. After the parties have initiated the Arbitration, Tuuko will provide the arbitrator with relevant documentation, including information collected in the informal dispute process and contents of the workstream communication.
6.6 AUTHORIZATION TO COLLECT ARBITRATION FEES
When you electronically authorize payment of the invoice for the Arbitration Payment as delivered to you by Tuuko by email, you irrevocably authorize and instruct (i) Tuuko Escrow or its Affiliates, as your agent, to charge your Payment Method for the amount of the payment for credit to your Escrow Account; and (ii) Tuuko Escrow, as escrow agent, to immediately release that amount from your Escrow Account and pay it to Tuuko. If Tuuko Escrow or its Affiliates cannot collect sufficient funds to fulfill the Escrow for any reason, Tuuko Escrow has no obligation with respect to making the payment to Tuuko on your behalf, and you will be considered as not having paid your portion of the Arbitration fees as required by this Section 6.
6.7 LIMITATIONS PERIOD FOR ARBITRATIONS
If both Freelancer and Client fail to demand binding Arbitration for an unresolved Dispute by the Arbitration Limitations Date, then Client and Freelancer will be deemed to have irrevocably authorized and instructed Tuuko Escrow to, and Tuuko Escrow will, release all funds in the Fixed-Price Escrow Account to Client.
6.8 ARBITRATION AWARD
You agree that the arbitrator is authorized to decide the Dispute within its discretion. You agree that the arbitrator’s award is final, that it may be entered in and enforced by any court of competent jurisdiction, and that if the arbitrator delivers notice of any award to Tuuko, then Tuuko and Tuuko Escrow have the right to treat such notice as conclusive and act in reliance thereon.
6.9 SERVICE FEES FOR ESCROW FUNDS RELEASED FOLLOWING DISPUTE ASSISTANCE
All Escrow Funds released under this program are subject to the normal Service Fees associated with Escrow Accounts, as detailed in the User Agreement and applicable Escrow Instructions.
All notices to a User required by these Escrow Instructions will be made via email sent by Tuuko to the User’s registered email address. Users are solely responsible for maintaining a current, active email address registered with Tuuko, for checking their email and for responding to notices sent by Tuuko to the User’s registered email address.
8. COOPERATION WITH THE DISPUTE ASSISTANCE PROGRAM
All claims, disputes or other disagreements between you and another User that are covered by the Dispute Assistance Program must be resolved in accordance with the terms in the Dispute Assistance Program. All claims filed or brought contrary to the Dispute Assistance Program will be considered improperly filed, and Tuuko will have the right to take any other action, including suspension or termination of your Account, and any other legal action as Tuuko deems appropriate in its sole discretion.
Tuuko, in its sole discretion, reserves the right to suspend or terminate your Account immediately upon giving notice to you if Tuuko believes you may be abusing the Dispute Assistance Program or as otherwise permitted by the Terms of Service. However, any Disputes for any Fixed-Price Contracts that existed prior to termination will be subject to the Terms of Service.