

Ask HN: Viable to implement an online marketplace that holds payments in escrow? - mshafrir

I am thinking about building an online marketplace for a certain set of products/services.  Due to the nature of this set of products/services, it is not viable for the seller to be paid out until he has fully delivered on this product/service.  In other words, I would need to hold funds between two parties in escrow until a future date that when the terms agreed upon by both parties are met.  Besides the execution and implementation of such a system, I know that this opens up a can of legal worms (e.g. "how long can I hold someone's money?").  So my question is, what are the basic legal considerations I need to make, and are there any examples of marketplaces/services with similar implementations that have worked successfully?
======
byoung2
_are there any examples of marketplaces/services with similar implementations
that have worked successfully?_

Elance does this (<http://help.elance.com/forums/30972/entries/34480>). They
let you set milestones, so funds can be released gradually over time. Elance
will mediate if there are any disputes (this will be your headache should you
go this route).

Alternatively, you can use an independent escrow service, such as escrow.com
(<https://www.escrow.com/solutions/escrow/process-service.asp>). I'm not sure
if this fits with your revenue model (were you going to take your percentage
from the escrow account?)

Definitely talk to a lawyer to see how liable you are when things go wrong.

------
michael_dorfman
The basic legal consideration you need to make is: talk to a lawyer.

Seriously. If you're going to go through with this plan, you're going to need
a lawyer anyway-- so, view the initial consultation as an interview.

