Jurisdiction(s):
United Kingdom

Key definition

Clawback definition

What does Clawback mean? Clawback describes the recovery of money already paid—such as commission, fees or bonuses—where payment was conditional and the condition later fails. It is a descriptive term used across legal contexts; in some areas (notably financial services remuneration) specific triggers and time limits are set by regulation rather than a general statutory definition. A common example is commission clawback in life and protection business. Where initial commission on a regular premium policy is paid on an indemnity basis, it is subject to an earnings period. If the customer stops paying premiums before the end of that period, the adviser must repay the...

Guarantor Revocation by Notice: Specific and Continuing Guarantees, Divisible Consideration, Drafting Conditions and Legal Consequences

Published by a LexisNexis Banking & Finance expert

Practice notes

Guarantees are often an important element of a financing transaction for lenders.

Guarantees commonly play a key role in finance deals for lenders and are typically taken together with a security package (see Practice Notes: Guarantees—How guarantees are used in finance transactions and Difference between security and quasi-security—Using security and quasi-security together). They are frequently a requirement of a lender's credit committee approval. It is therefore crucial to grasp when a guarantor might be freed or discharged from liability under a guarantee. This Practice Note examines when a guarantor can revoke its liability by giving notice to the lender, and the resulting effect of that revocation. Note that there are several additional scenarios in which a guarantor’s liability will come to an end. For instance, a guarantee may terminate because:

the guaranteed obligation is fulfilled by the principal and the guarantee is discharged, or the guarantor fulfils its own obligations under the guarantee—for more information, see Practice Note: Discharging guarantees by repayment or performance and Clawback considerations
the parties agree to release the guarantor—for more information, see Practice Note: Releasing guarantors by agreement between the parties, and
certain circumstances have arisen which result in

...

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Web page updated on 21/05/2026

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