2. Situations when an earnout might be appropriate. 3. An earnout provision makes the purchase price (typically, some part of it) payable in the future dependent on the buyer's financial performance.What is an Earnout Agreement? ​​An earnout agreement, also referred to as an earn-in or earn-out, is a type of acquisition payment structure. Asset purchase agreements can be a useful way to create a new business while leaving unwanted resources and potential issues with the seller. This article looks at how earn outs work, examines common earn out structures and provides tips for negotiating your earn out. The general rule is that contracts are freely assignable and can be transferred from one party to another. There are, however, exceptions to this general rule. Sloppy construction of the asset purchase agreement could cause a mostly tax-exempt transaction to become completely subject to sales tax.