Limit set up on time for agreement (4)
I believe the answer is:
pact
'for agreement' is the definition.
(a pact is an agreement or deal)
'limit set up on time' is the wordplay.
'limit' becomes 'cap' (capping is a kind of limiting).
'set up' says the letters should be written in reverse (in a down clue, letters go up).
'on' says to put letters next to each other.
'time' becomes 't' (abbreviation).
'cap' backwards is 'pac'.
'pac'+'t'='PACT'
(Other definitions for pact that I've seen before include "Agreement, bargain" , "Formal agreement between parties or states" , "deal" , "Treaty, formal agreement" , "Agreement, covenant" .)