Shotgun Clause

Categories: Regulations

It sounds like what happens when contract negotiations get really nasty. Not quite as bad as the AK-47 clause or the nuclear warhead clause, but pretty contentious.

In reality, it isn't quite as aggressive as gunplay, but the term "shotgun clause" does get its name from the fact that it forces someone to do something. It's a nickname for a provision in a partnership agreement that can compel the end of the partnership. It can either require that one partner sells their shares to the other partners, or it can force one of the group to buy out someone else.



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