Definition:
Clawback refers to the act of reclaiming money previously given to another individual. It can also refer to the government’s action of revoking tax benefits, resulting in individuals being required to pay higher taxes.
Clawback is the process of reclaiming money that has already been disbursed or recouping tax benefits through additional forms of taxation. For instance, if a company gives a bonus to an employee but later finds out that the employee did not meet the performance standards for the bonus, the company may initiate a clawback to recover the bonus payment. Similarly, governments may offer tax benefits or incentives to individuals or businesses, but if it is later discovered that the recipient did not meet the criteria for the benefit, the government may initiate a clawback by imposing additional taxes or fines. Both examples demonstrate the concept of clawback, which involves reclaiming money or benefits that were previously distributed. This can occur in various situations, including employment agreements, financial transactions, or government regulations.
A clawback refers to a legal provision that allows a party to recover funds or assets that were previously distributed or paid out.
A clawback can be enforced when certain conditions are met, such as a breach of contract, fraud, or violation of specific laws or regulations.
Typically, the party initiating a clawback is the one who suffered a loss or was harmed by the distribution of funds or assets.
Clawbacks can apply to various types of funds or assets, including bonuses, commissions, profits, dividends, or any other form of compensation.
No, clawbacks can be applicable in various contexts, including corporate, financial, and legal settings, depending on the specific circumstances.
In some cases, clawbacks can be enforced retroactively, allowing the recovery of funds or assets that were distributed in the past.
Yes, clawbacks can be enforced in bankruptcy cases, particularly when there are preferences or fraudulent transfers involved.
The purpose of a clawback provision is to provide a mechanism for recovering funds or assets in situations where their distribution was improper or unjust.
Yes, clawbacks can be challenged in court if there are valid legal grounds to dispute the recovery of funds or assets.
The limitations and time restrictions for initiating a clawback can vary depending on the jurisdiction and the specific circumstances involved. It is advisable to consult with a legal professional to understand the applicable laws and regulations in your jurisdiction.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
- Page URL:https://dlssolicitors.com/define/clawback/
- Modern Language Association (MLA):Clawback. dlssolicitors.com. DLS Solicitors. May 09 2024 https://dlssolicitors.com/define/clawback/.
- Chicago Manual of Style (CMS):Clawback. dlssolicitors.com. DLS Solicitors. https://dlssolicitors.com/define/clawback/ (accessed: May 09 2024).
- American Psychological Association (APA):Clawback. dlssolicitors.com. Retrieved May 09 2024, from dlssolicitors.com website: https://dlssolicitors.com/define/clawback/
Our team of professionals are based in Alderley Edge, Cheshire. We offer clear, specialist legal advice in all matters relating to Family Law, Wills, Trusts, Probate, Lasting Power of Attorney and Court of Protection.
All author posts