A Default Clause is a contractual provision that states what should happen if one of the parties involved does not fulfill their obligations. This clause is usually included in a contract to ensure that all parties are held accountable for their actions. Default Clauses can include a variety of remedies, such as specific performance, liquidated damages, or termination of the contract. There are three main types of Default Clause: Specific Performance, Liquidated Damages, and Termination. Specific Performance is a remedy that requires a party to fulfill their obligations as outlined in the contract. Liquidated Damages are a predetermined amount of money to be paid should one of the parties default on their obligations. Termination is a remedy that allows the non-defaulting party to terminate the contract if the other party does not meet their contractual obligations.
Default Clause
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FAQ
Default lets the lender seize collateral that's been pledged and sell it to recoup the amount of the loan. Usually, the clause includes defaulting on loan agreements or notes, failing to perform contractual duties, or violating any warranties and representations.
Typical events of default in loan agreements include non-payment or late payment of amounts due, breach of certain material representations and warranties or covenants, cross-default, breach of change of control provisions, and insolvency.
The Contractor shall be in default under this Contract if Contractor commits any material breach of any covenant, warranty, obligation or certification under this Contract, fails to perform the Services in conformance with the specifications and warranties provided in this Contract, or clearly manifests an intent not
A default is a failure to fulfill an obligation. Defaulting is most common in regards to debtor-creditor law and contract law. Typically, a default leads to judicial proceedings or triggers the application of a separate contract provision.
A default clause is a provision in a legal contract that states what will happen if either party in a contract defaults or fails to hold up their end of the agreement.
You will be in default if you break any promise you make under this Agreement. You will be in default if you die, file for bankruptcy or become insolvent, that is, unable to pay your obligations when they become due.
Many loan agreements contain an 'events of default' clause. This type of clause is designed to protect the lender from non-repayment of the loan and provide them with contractual rights under the loan agreement. As a borrower, events of default clauses can have significant financial consequences.
A default is a failure to fulfill an obligation. Defaulting is most common in regards to debtor-creditor law and contract law. Typically, a default leads to judicial proceedings or triggers the application of a separate contract provision.