Word of the Day
March 4, 2020
Clawback
A contractual provision requiring the return of money or benefits under specified conditions, particularly when performance obligations are not met or agreements are violated.
From 'claw' (Old English 'clawu') combined with 'back,' originally used in finance to describe the recovery of funds. The term gained prominence in corporate governance and government contracts during the late 20th century.
Usage Examples
- The state should have included a clawback provision in the VF Corp incentive package to recover taxpayer funds if job targets were not met.
- Without clawback language in economic development agreements, governments have no recourse when companies fail to deliver promised benefits.
- Proper clawback mechanisms hold recipients of public subsidies accountable for fulfilling their contractual commitments.
From the Show
The concept of clawback provisions dominated the March 4, 2020 discussion as Kim and Joshua Sharf examined how Colorado failed to recover taxpayer funds when the outdoor retailer show reneged on its commitment to hold two annual events in Denver.