M&A Foundations · glossary
Part of the price held back — by the buyer or in escrow — for a period after completion, as a ready fund if warranty or indemnity claims arise. Simpler than suing a seller who has already distributed the money. Chapter 9
Explained in Chapter 9, Price Mechanisms and Adjustments, of M&A Foundations.
The last family of tools is about when the price is paid and how claims get funded, not how it is calculated. An escrow (standard in US practice, and the word American lawyers will reach for) puts part of the price into a joint account with an escrow agent, usually a bank or the lawyers. That part of the price is released to the seller on agreed dates unless the buyer has notified claims. A retention is the same idea without the agent: the buyer simply holds part of the…Read Chapter 9, Price Mechanisms and Adjustments →
Related terms
Where this term lives
Every chapter of M&A Foundations is free to read, including the full training share purchase agreement. It is part of one complete fictional deal, with every document attached and a test after every chapter. Open M&A Foundations → · All terms A–Z →