Recapture Chargeback Clause Samples
A Recapture Chargeback clause establishes the right of a party, typically a lender or service provider, to reclaim funds or benefits previously paid out if certain conditions are not met or if an event triggers repayment. In practice, this clause may apply when an advance, commission, or incentive is given based on anticipated performance or fulfillment of obligations, and if those obligations are not satisfied—such as a loan default or a cancelled transaction—the recipient must return the funds. The core function of this clause is to protect the paying party from financial loss by ensuring they can recover payments made in error or under unmet conditions.
Recapture Chargeback. In the event the Company has taxable income chargeable as ordinary income under the recapture provisions of the Code, each Member’s share of taxable gain or loss as a result of gain from sales shall be allocated, to the extent possible, pro rata among the Members who received depreciation or cost recovery allocations which gave rise to the recapture income until the amount of such prior allocations has been charged back to such Members.