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The failure to make timely payment of interest or principal on a debt security or to otherwise comply with the provisions of a bond indenture. A breach of a covenant. In context of project financing, a technical default signals a project parameter is outside defined or agreed limits or a legal matter is not yet resolved.


The failure to make payments on a debt. One may default on any debt, such as a mortgage or a bond. Default is a very serious matter and may entitle the lender or bondholder to take possession of one's assets in order to recover the amount lost in principal and interest payments on the debt. Default also has a negative impact on one's creditworthiness in the future.


The failure to live up to the terms of a contract. Generally, default is used to indicate the inability of a borrower to pay the interest or principal on a debt when it is due. See also technical default.


If a person or institution responsible for repaying a loan or making an interest payment fails to meet that obligation on time, that person or institution is in default.

If you are in default, you may lose any property that you put up as collateral to get the loan. For example, if you fail to repay your car loan, your lender may repossess the car.

Defaulting has a negative impact on your credit history and your credit score, which generally makes it difficult to borrow again in the future. In fact, failure to pay on time is the single most important contributor to a poor credit history.

A bond issuer who defaults may not pay interest when it comes due or repay the principal at maturity, or both.


The failure to meet one's obligations in a timely manner. There are several important concepts relating to defaults in the real estate field:

• Leases and mortgages often differentiate between monetary defaults, such as failure to pay money when due, and nonmonetary defaults such as a failure to provide proof of insurance or copies of monthly financial statements. If so, there will be different notice provisions and grace periods for each.

• Unless a sale contract contains language that “time is of the essence,” or one party has made the other aware that time is critical, then a court will ordinarily award a purchaser a reasonable amount of time to complete closing, even if it is past the contract date.

• Some states have statutes allowing collection of attorneys' fees when there has been a default in the contract. Other states require specific language in the contract allowing for collection of attorneys' fees.


Failure of the borrower to honor the terms of the loan agreement.

Lenders usually view borrowers delinquent 90 days or more as in default.

See Payment Problems.

References in periodicals archive ?
There are no any serious antinomies between the proposed system and the national law system, and we only have a problem of adaptation of secured transactions system to the existing legislation in Azerbaijan , Wohlers said.
The vibrant discussion session dwelt on concerns of hosting secured transactions registry, use of intangible assets as collateral, enforcement issues and the attendant potential for conflict during enforcement as well as partial credit repayments.
be made against best international practices in existence, in particular the EBRD "Core Principles for a Secured Transactions
explore the law of secured transactions through a series of problems meant to encourage law students to concentrate on the exact statutory language in the Uniform Commercial Code and related federal statutes.
Dahan and Simpson (Office of the General Counsel, the European Bank for Reconstruction and Development) bring together international contributors to examine secured transactions reform (also known as collateral or pledge law reform) from legal and economic perspectives.
It will also produce digital certificates that will enable users to enjoy secured transactions over open networks, without worrying about issues such as confidentiality, integrity, authenticity and non-repudiation.
said: "The applications provided by the software we are creating exceed industry standards for secured transactions and are a vital part of the nature of Secure Transaction International Corporation's business, greatly increasing the security of Internet transactions.
With CommercePac, the division of Dense-Pac, we will have an Internet site that will supplement our ability to provide what our customers demand, fast, convenient and secured transactions that will provide them with the ability to purchase quality footwear.