BUY-BACK CLAUSE

buy-back clause. 1.Contracts. A provision that requires a manufacturer or franchiser to buy back inventory and equipment if the distributor or franchisee’s contract is terminated prematurely. 2.Contracts. A clause allowing the seller of property the right or opportunity to repurchase the property under stated conditions. 3.Insurance. An insurance-policy clause that provides for the reinstatement of coverage that the insurer excludes or cancels if the insured meets certain conditions. • For instance, buy-back clauses are often used to reinstate some of the coverage taken away under pollution-exclusion clauses.[Blacks Law 8th]