Startup Terms Glossary
What is a Holdback Escrow?
Holdback escrow is an agreement that outlines how certain funds will be set aside to cover the cost of fees associated with a breach of contract by the seller in the deal. Better known as escrow holdback, this amount is usually a percentage of the total purchase price that will be held to be security for the buyer.
Holdback Escrow Examples
Example of a situation in which an escrow holdback might be needed:
- Example 1. A buyer is interested in buying a startup but negotiations have been contentious to date. The buyer may set aside money in case the seller breaches the purchase agreement or terms of the deal.
Here’s a web page about holdback escrows.
ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.
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