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What is a contingent payment?

Modified on: May 18th, 2018

A contingent payment is a payment that is paid when something happens in the future. Contingent payments are often used in M&A transactions to bridge the price gap between buyer and seller. For example, if a buyer and seller disagree on the purchase price because they disagree about future sales, the buyer may agree to make additional payments to the seller if future sales are higher than expected.

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