Can I insist an earn-out be capped so I know my maximum exposure as a buyer?

Yes, nothing requires an earn-out to be open-ended, and buyers commonly negotiate a maximum aggregate earn-out payment so their total purchase price exposure has a known ceiling regardless of how strongly the business ends up performing after closing. This gives a buyer clearer visibility into worst-case, or best-case-for-the-seller, total consideration when planning the deal's overall financing and budgeting.

A seller may resist a cap, since it limits their potential upside if the business substantially outperforms the projections used to set the earn-out structure, particularly if the seller believes the business is genuinely poised for strong growth under new ownership. Whether a cap ends up in the final agreement, and at what level, is a real point of negotiation rather than a standard feature either way, and it often gets traded off against other terms, such as the metric chosen, the length of the earn-out period, or the base purchase price itself. If a cap is agreed, the mechanics for how it interacts with the underlying calculation should be spelled out clearly in the earn-out provisions.