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Glossary Terms
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Clawback clauses are often included in employment contracts, executive compensation packages, investment agreements, and other similar arrangements to safeguard against instances of misconduct or poor performance.
A clawback clause is a contractual provision that enables one party to reclaim previously disbursed funds or benefits from another party under specific circumstances. These circumstances typically involve instances of misconduct, breach of contract, or other predefined triggering events.
Clawback clauses are commonly utilized in various agreements, including employment contracts, executive compensation packages, investment agreements, and partnership agreements, to mitigate risks and protect the interests of the parties involved.
A clawback clause may refer to a provision that allows the seller to regain ownership of the property or receive additional compensation under certain conditions. For example, in land development deals, a seller might include a clawback clause that entitles them to a percentage of future profits if the buyer redevelops or sells the property within a specified timeframe.
A clawback clause typically refers to a provision within legislation or international agreements that allows governments to temporarily suspend or derogate from certain human rights protections during exceptional circumstances, such as times of national emergency or public crisis.
These clauses are designed to balance the protection of individual rights with the necessity of maintaining public order and security. However, the use of clawback clauses in human rights contexts is often subject to strict scrutiny to ensure that any limitations on rights are necessary, proportionate, and temporary.
Special considerations under clawback clauses:
Examples of clawback provisions:
Risks of implementing a clawback clause:
Three types of clawback clauses include:
