escape clause

escape clause definition - business

escape clause

A contract provision specifying conditions under which the parties can avoid liability for nonperformance. For example, a venture capital firm that has signed a contract to provide funding for a new business might include an escape clause that releases them in the event the business does not achieve identified goals by specific dates.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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