Legal Writing

Article on Clumsy Drafting of an Earnout Provision

By Ken Adams

A common feature of M&A contracts is the “earnout” provision?a provision that specifies that the purchase price will be increased if the business being acquired meets, post-closing, stated financial-performance targets.

If you’re interested in earnout provisions, of if you’d just like to see yet one more example of how lackadaisical drafting can result in litigation, you might want to check out a recent New York Law Journal article entitled “Negotiating Earnout Provisions in Acquisition Pacts.” It’s by Christopher Lamal of the New York City-based Lamal Law Office. Click here to go to a copy.

Full post as published by AdamsDrafting on July 23, 2008 (boomark / email).