“Nlocktime” is a feature that makes it possible to instruct miners to delay adding a transaction into the block chain until an specified date in the future. Thus, a party can agree to a transaction but place it on hold until a specific future date, allowing them both to withdraw their money and cancel the transaction before it actually goes through, if the need arises. This can be used to create “dead man’s switches” in the event that one party in a transaction ceases to exist, to provide an automatic refund. This could have been used, for example, by the Silk Road to protect clients’ funds from seizure by the FBI. GreenAddress, a secure hybrid web wallet, uses transaction locking in this fashion.
The full draft is interesting and worth reading, and you can peruse it at Todd’s Github here.