Earn-Out Agreement

Contingent Agreement
A Contingent Agreement is a contract arrangement in which certain obligations depend on the occurrence of a particular event. These agreements often come into play during mergers and acquisitions, real estate transactions, and litigation settlements.
Earn-Out Agreement
An earn-out agreement is a contingent contract used in M&A transactions where the purchaser pays an initial amount at acquisition and agrees to pay additional future sums contingent on the target company meeting specified performance targets.

Accounting Terms Lexicon

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