Event of default: Difference between revisions

[[File:Default in our Stars.png|450px|thumb|center|Look, ''you'' try illustrating the idea of default.]]

}}Sometimes known as an [[enforcement event]],<ref>Usually where [[security]] is involved.</ref> an [[event of default]] is an action a counterparty takes which justifies the innocent party terminating the contract ''under its terms'', [[close out|closing out]] open transactions, and raining down fiery hell on the wronger and its affiliates, directors, officers, employees, agents and delegates.

 

 

{{Event of default vs fundamental breach}}

*'''{{isdama}}''': {{isdaprov|Event of Default}}  

*'''{{gmsla}}''': {{gmslaprov|Event of Default}}  

*'''{{gmra}}''': {{gmraprov|Event of Default}}

Not to be, although easily, confused with {{isdaprov|Termination Events}} under the {{isdama}}. These are (in the main) kinder and gentler than {{isdaprov|Events of Default}}, arise from factors outside the parties control ({{isdaprov|Force Majeure}}, {{isdaprov|Tax Event}}s, {{isdaprov|Credit Event Upon Merger}}s, {{isdaprov|Illegality}} and so on), and in many cases relate to some only and not all of the {{isdaprov|Transaction}}s under the {{isdama}}. They justify termination but at less punitive [[mid market]] terms. There are some Termination Events which are more like Events of Default, though: most of these are the tailored ones the parties agree as {{isdaprov|Additional Termination Event}}s.

*[[Cross default]]