Earn-outs bridge a valuation gap between buyer and seller, transfer some performance risk to the seller, and keep key sellers engaged post-sale. Typical structures: 60-80% paid at completion, the rest contingent. Common disputes: which costs count against the metric, decisions that benefit long-term but hurt the metric, the buyer's right to make changes that affect performance. Earn-out drafting is one of the highest-stakes parts of any M&A document — get the definitions wrong and you'll spend a year arguing about them.