Contingent Liability Escrow

A specific ring-fenced holdback against a known, unresolved liability — sellers should ensure the amount held back is proportionate to actual exposure, not an inflated buffer.

Seller Example

Promoter of a Nagpur cotton ginning unit facing a ₹1.8 Cr disputed excise demand under appeal negotiates the contingent escrow down to exactly 100% of exposure (₹1.8 Cr) rather than the buyer's initial 150% "buffer" ask, freeing up an extra ₹90 Lakh of proceeds at closing.