Events of Default

Abstract

In many ways the default clause is the core of a loan agreement. The ultimate concern of any lender, unless it is a charity, must inevitably be whether and how it is to recover its money. Default by the borrower is the trigger that enables the lender to implement the sanctions provided in the agreement, to realise its security or claim under a guarantee. The threat of a default situation is the central mechanism by which the lender ensures that the borrower carries out its obligations.