Showing up unasked
Provision and reciprocity get called by one name because both look like giving. They are not the same thing, and the difference is not manners. It is whether anyone is counting.
condition
Meaning
Contractual limitations that govern the execution of an agreement establish the parameters under which performance is required. A specified condition must be met before an obligation becomes active or gets discharged. This mechanism creates a protective boundary for the party that holds the asset or seat.
By tying performance to an objective milestone, the arrangement reduces the need for constant supervision.
Deferral Mechanism
Postponing the transfer of ownership or control until a specific event occurs shields the founder from premature exposure. This structure allows the builder to verify that the partner is fully aligned with the project. It prevents the early dissipation of equity.
Delaying the outcome forces both parties to maintain high standards of performance during the critical early phases, ensuring that energy is spent on real milestones.
Execution Trigger
A clear milestone acts as an objective signal that completes the transaction. When the benchmark is met, the obligation executes automatically without the need for further debate. This clarity removes the emotional weight of a discretionary handover.
Performance Limit
Setting a boundary on how long the arrangement remains active prevents a deadlock if the milestone remains unreached. It allows both parties to exit cleanly after a set period. Without this protection, the obligation persists indefinitely.