First, work out which of two things happened
There is a real difference between a buyer who cannot pay and a buyer who says they do not owe it, and they need opposite responses. Missed payments with an apology and a new date is a cash-flow problem, and cash-flow problems are sometimes worth accommodating. A buyer arguing the targets were not met, or that you misrepresented something, is a dispute about the contract. Find out which before you do anything, because treating a dispute as a delay wastes the time when your options were widest.
If they are disputing the targets
Go to the definition in the agreement and read exactly how the metric was written — revenue or profit, gross or net, measured over what period, and calculated by whom. Ambiguity here is the single most common cause of earnout disputes, and it is usually ambiguity you both signed without noticing. Ask for the underlying figures you are entitled to see. A buyer who will not produce the numbers is telling you something, and a buyer whose numbers are simply worse than hoped is a different conversation entirely.
If they cannot pay
You have a choice a court cannot make for you: restructure or enforce. Restructuring — a longer schedule, smaller instalments, sometimes a reduced total for certainty — gets you paid slowly. Enforcing may get you nothing from a business that has no money, which is the outcome sellers underestimate. Look at whether the underlying business is still trading and still generating what it did, because that determines whether there is anything to enforce against at all.
What the agreement gives you
Read these four before doing anything else. Acceleration: whether a missed payment makes the whole balance immediately due. Security: whether anything backs the obligation. Personal guarantee: whether an individual is liable, not just a company. And reversion: whether the assets return to you on default. Most small deals have far weaker versions of these than sellers assume, and finding out at this point is how people discover that their earnout was effectively an unsecured loan to a stranger.
Why security matters more than the headline number
This is the lesson worth taking even if your own deal is fine. A deferred payment is only worth what you can enforce, so a $60,000 clean close frequently beats $80,000 with $30,000 deferred and nothing securing it. The things that make deferred consideration real are a personal guarantee, a charge over the assets, an escrow holding the balance, or a reversion clause returning the site if payments stop. Without at least one, the extra headline value is a hope rather than a price.
The practical sequence
Write to them citing the clause and the amount, with a deadline — in writing, because verbal chasing has no evidential value. Ask for the figures if targets are in question. Get advice before accepting any variation, since agreeing to a new schedule can affect your position on the original terms. Then decide between a negotiated settlement and formal action, weighing the cost of the second against what is realistically recoverable. At small-deal sizes, a negotiated outcome is usually the rational one even when you are plainly right.
If the site is still running on your work
A specific and galling situation: the buyer stopped paying and is operating a business built on your content, your list and your rankings. If the agreement has a reversion clause, this is what it is for and now is when to invoke it. If it does not, the claim is for the money rather than the asset, and the asset stays with them. It is the strongest argument for negotiating a reversion clause on any deal with meaningful deferred consideration — it is the only remedy that does not depend on the buyer having cash.
Get advice, and be realistic about scale
This is general context, not advice, and remedies depend on your jurisdiction and your drafting. Two practical notes. Have a lawyer read the acceleration, security and default clauses before you act, because a wrong first move can weaken your position. And be honest about proportion: pursuing a five-figure balance across borders can cost more than the balance, which is exactly why the security you negotiated at signing matters more now than anything you do next.
- Establish first whether it is a cash-flow problem or a contract dispute — they need opposite responses.
- Ambiguity in how the earnout metric was defined is the most common cause of these disputes.
- Read the acceleration, security, personal guarantee and reversion clauses before acting.
- A deferred payment is worth only what you can enforce: a clean lower price often beats a deferred higher one.
- A reversion clause is the only remedy that does not depend on the buyer having money.
A higher price paid over time is not a higher price until it arrives. Get a free valuation to compare a deferred offer against a clean one.
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