Default definition: Copy, customize, and use instantly
Introduction
The term "Default" refers to the failure of a party to perform a required obligation under a contract, typically within a specified time frame. It can arise from various situations, such as non-payment, failure to meet other contractual terms, or failure to meet agreed deadlines.
Below are various examples of how "Default" can be defined in different contexts. Copy the one that fits your needs, customize it, and use it in your contract.
Definition of "Default" as a failure to meet financial obligations
This definition ties "Default" to missed payments.
"Default" means the failure of a borrower to make required payments on a loan, bond, or other financial obligation by the due date.
Definition of "Default" as a breach of contract
This definition applies "Default" to non-compliance with contractual terms.
"Default" refers to a party’s failure to fulfill its obligations under a contract, whether financial, operational, or performance-based.
Definition of "Default" as a loan acceleration trigger
This definition connects "Default" to creditor remedies.
"Default" means an event that, upon occurrence, allows lenders to demand immediate repayment of the outstanding principal and accrued interest.
Definition of "Default" as an insolvency indicator
This definition ties "Default" to financial distress.
"Default" refers to a situation where an entity is unable to meet its debt obligations due to insolvency or insufficient cash flow.
Definition of "Default" as an event of termination
This definition applies "Default" to contract enforcement.
"Default" means any material breach of agreement that gives the non-breaching party the right to terminate the contract or seek remedies.
Definition of "Default" as a legal violation
This definition connects "Default" to regulatory non-compliance.
"Default" refers to the failure to comply with laws, regulations, or court orders, resulting in potential fines, penalties, or enforcement actions.
Definition of "Default" as non-performance of obligations
This definition ties "Default" to operational failures.
"Default" means the inability or refusal of a party to perform obligations as agreed, whether delivering goods, services, or fulfilling conditions.
Definition of "Default" as covenant breach
This definition applies "Default" to financial agreements.
"Default" refers to the failure to comply with covenants in loan agreements, such as maintaining financial ratios or reporting obligations.
Definition of "Default" as a security agreement violation
This definition connects "Default" to collateral enforcement.
"Default" means the occurrence of an event that permits a secured party to seize or liquidate collateral under a security agreement.
Definition of "Default" as a tax delinquency
This definition ties "Default" to government obligations.
"Default" refers to the failure to pay taxes owed to federal, state, or local authorities by the specified deadline.
Definition of "Default" as a delay in performance
This definition applies "Default" to contract timelines.
"Default" means any delay in the performance of obligations beyond the agreed-upon timeframe without an approved extension or waiver.
Definition of "Default" as a non-payment of interest
This definition connects "Default" to financial contracts.
"Default" refers to a borrower’s failure to pay interest due on a loan or bond as stipulated in the agreement.
Definition of "Default" as bankruptcy filing
This definition ties "Default" to insolvency proceedings.
"Default" means a financial event where a debtor files for bankruptcy protection or enters restructuring due to an inability to meet obligations.
Definition of "Default" as abandonment of obligations
This definition applies "Default" to willful non-performance.
"Default" refers to a party’s intentional refusal to perform contractual duties despite having the capacity to do so.
Definition of "Default" as a supplier’s failure to deliver
This definition connects "Default" to procurement contracts.
"Default" means the failure of a supplier to provide goods or services in accordance with agreed specifications and deadlines.
Definition of "Default" as a rental agreement violation
This definition ties "Default" to lease contracts.
"Default" refers to a tenant’s failure to pay rent, maintain the property, or comply with lease terms, leading to potential eviction.
Definition of "Default" as cross-default provision activation
This definition applies "Default" to multi-lender agreements.
"Default" means a provision in a financial contract stating that a default on one obligation constitutes a default on all related obligations.
Definition of "Default" as a credit rating downgrade trigger
This definition connects "Default" to credit risk.
"Default" refers to an event that results in a credit rating downgrade, indicating increased risk for lenders and investors.
Definition of "Default" as a failure to meet project milestones
This definition ties "Default" to project-based contracts.
"Default" means the inability to achieve required milestones in a development or construction project, leading to penalties or termination.
Definition of "Default" as a financial distress signal
This definition applies "Default" to market perception.
"Default" refers to an event that signals financial instability, such as inability to refinance debt or obtain new credit.
Definition of "Default" as a delay in principal repayment
This definition connects "Default" to debt obligations.
"Default" means the failure to repay the principal amount of a loan or bond upon maturity or agreed repayment schedule.
Definition of "Default" as an event triggering personal guarantees
This definition ties "Default" to guarantor liability.
"Default" refers to the occurrence of a breach that requires a personal guarantor to fulfill the obligations of the original debtor.
Definition of "Default" as non-payment of dividends
This definition applies "Default" to corporate finance.
"Default" means a company’s inability or failure to pay declared dividends to shareholders as scheduled.
Definition of "Default" as a missed insurance premium
This definition connects "Default" to policyholder obligations.
"Default" refers to the non-payment of insurance premiums, which may lead to policy cancellation or loss of coverage.
Definition of "Default" as a government bond default
This definition ties "Default" to sovereign debt.
"Default" means a government’s failure to make interest or principal payments on issued bonds, leading to credit downgrades or restructuring.
Definition of "Default" as regulatory non-compliance
This definition applies "Default" to legal frameworks.
"Default" refers to a company’s failure to adhere to regulatory requirements, potentially resulting in fines, sanctions, or license revocation.
Definition of "Default" as an event triggering foreclosure
This definition connects "Default" to real estate loans.
"Default" means a borrower’s failure to make mortgage payments, resulting in lender actions to foreclose and reclaim the property.
Definition of "Default" as a supplier’s inability to perform
This definition ties "Default" to contract risk.
"Default" refers to a supplier’s failure to meet contractual obligations, resulting in penalties or termination of the agreement.
Definition of "Default" as non-compliance with merger terms
This definition applies "Default" to acquisition agreements.
"Default" means the failure to meet conditions set forth in a merger or acquisition agreement, potentially causing deal termination.
Definition of "Default" as payment failure under installment plans
This definition connects "Default" to structured payments.
"Default" refers to the failure to make scheduled payments under an installment plan, leading to acceleration or penalties.
Definition of "Default" as employment agreement breach
This definition ties "Default" to labor contracts.
"Default" means the failure of an employee or employer to fulfill their contractual obligations under an employment agreement.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.