In case of conflict between a PSA and escrow instructions, which will prevail?

In real estate transactions, a Purchase and Sale Agreement (PSA) outlines the terms of the sale, including the obligations of each party. However, once the agreement is executed and the escrow process begins, the escrow instructions become a critical element. These instructions are typically created to facilitate the transaction and ensure compliance with legal requirements, which may include how funds are disbursed, how documents are handled, and the specific duties of the escrow agent.

When a conflict arises between the PSA and the escrow instructions, the escrow instructions will prevail. This is because once a transaction enters escrow, the escrow instructions are tailored to the specific transaction and reflect the most current agreement on how to execute the terms of the PSA, ensuring that all parties fulfill their obligations as intended. Escrow instructions often serve as a final directive to handle the closing of the transaction correctly, accommodating any nuances that may not have been specified in the PSA.

This prioritization of escrow instructions supports the efficient management of the closing process, making sure that all regulatory and procedural standards are met, while the PSA serves as the foundational agreement that initially set the terms for the sale. Thus, in the event of any discrepancies, the escrow instructions provide clarity and operational detail that govern the execution of the agreed