Holdbacks

Holdbacks refer to the act or instance of withholding something, usually money, information, or action, until a specified condition is met or a particular time arrives. They often serve as a financial safeguard, a strategic delay, or a means of ensuring compliance or quality. In various contexts, holdbacks can be used to manage risk, incentivize performance, or control the flow of resources. They are often implemented in business transactions, real estate deals, or even personal agreements. The purpose is usually to protect one party from financial loss or a lack of performance from the other party.

Holdbacks meaning with examples

• The construction company implemented a holdback on 10% of the project's payment, to be released upon final inspection and approval of all completed work. This ensured quality and encouraged the contractor to address any outstanding issues. This strategy is common to ensure work is done to a high standard.
• The publisher placed a holdback on the author's royalties until the book reached a certain sales milestone. This incentivized the author to actively promote the book. It is a popular practice within the publishing industry to motivate the author.
• Due to unforeseen circumstances, there was a holdback on the release of the new software update. This allowed the development team to thoroughly test and address any critical bugs before releasing it to the public. This prevents issues when the update is made live.
• The real estate transaction involved a holdback to cover potential repairs identified during the inspection. This protected the buyer from hidden defects. This is a common practice within the industry to safeguard purchases.
• To manage cash flow, the company implemented a holdback on vendor payments until after the invoice was verified. This provided time for checks on all invoices. This helped to ensure that the company could keep its funds under control.