What do you mean by buyout?

A buyout is the acquisition of a controlling interest in a firm, and the terms are interchangeable. A management buyout occurs when the stock is purchased by the company’s management, but a leveraged buyout occurs when the buyout is financed with a large amount of debt. When a corporation goes private, buyouts are common.

Buy-Out a contract generally means to substantially alter the terms of the contract by:

  1. termination to the contract with all parties agreeing to something different than what was contained in the original contract;

  2. removing a party to the contact; and

  3. ending the contract before its natural expiration date.

In these circumstances consideration would be exchanged or money would be paid by one party to the other to accomplish the above since there is a meeting of the minds to buy -out the individual or buy-out the contract.