# Clawback

A right to take money back once the results behind it fail to hold.

It turns up wherever cash moves before the facts are final: an [earnout](https://searchspheresource.com/glossary/earnout) paid on a quarter that later reverses, a distribution to investors a later loss makes excessive, or a commission on revenue that never collected. The version worth having is the one written into the [purchase agreement](https://searchspheresource.com/glossary/purchase-agreement), because recovering money from a seller who has already spent it is a lawsuit, while withholding it is a deduction. Ask what actually backs any clawback you are offered.

In numbers: A $150,000 earnout paid on a record quarter that later reverses is recoverable only if the agreement says so, while the same $150,000 held in escrow for 12 months needs no lawsuit at all.

Source: https://searchspheresource.com/glossary/clawback
Not dated: A definition is editorial: what a term means, why it matters, and an example. None of it reads a source that can go stale, so there is no date to take and a stamped one would be the build time wearing a costume.

Site index for machines: https://searchspheresource.com/llms.txt