A walk-away provision gives the defendant the right, not the obligation, to void the settlement if the participation rate does not reach the specified level. The defendant may elect to proceed despite falling short.
Provisions specify the measurement date and election period.
Alternative Names:
Walk-Away Right, Blow Provision
Why it Matters?
Structuring the threshold as an option rather than an automatic termination is what preserves flexibility, since a defendant reaching ninety-two percent against a ninety-five percent threshold usually prefers to proceed rather than restart. Automatic termination provisions eliminate that choice and can collapse a settlement over a marginal shortfall. The measurement date and election period should be specified precisely to avoid disputes at exactly the moment the deal is closing.
Frequently Confused with
Related terms
Frequently asked questions
Should the threshold terminate automatically?
What should the provision specify?
