Legal Definitions - conventional remission

Conventional remission refers to the voluntary cancellation or reduction of an obligation, debt, or penalty, which occurs as a result of an agreement or understanding between the parties involved, rather than being imposed by law or a court order.

Essentially, it's when parties mutually agree to forgive or lessen a financial or contractual duty that one owes to the other.

Here are some examples:

• Debt Forgiveness Between Businesses: Imagine a small publishing house that owes a significant amount of money to a paper supplier. Due to an unexpected downturn in book sales, the publishing house is struggling to make its payments. The paper supplier, valuing the long-term relationship and understanding the temporary hardship, agrees to forgive 20% of the outstanding debt. This agreement between the two companies to reduce the owed amount is a form of conventional remission.

  This illustrates the term because the reduction of the debt was not mandated by a court or law, but was a voluntary agreement between the supplier and the publishing house.

• Waiver of Contractual Penalty: A software development company signs a contract with a client, agreeing to deliver a new application by a specific date. The contract includes a clause for a daily penalty if the deadline is missed. Due to unforeseen technical challenges, the development team anticipates a delay of a few days. The client, after reviewing the situation and acknowledging the complexity of the project, agrees to waive the penalty clause for the first five days of delay. This mutual agreement to forgo the penalty is an example of conventional remission.

  Here, the client voluntarily agreed to remit (cancel) the penalty that they were contractually entitled to, based on an understanding with the software company.

• Rent Arrears Agreement: A tenant falls behind on their rent for two months due to a temporary job loss. The landlord, instead of immediately pursuing eviction or demanding full payment, meets with the tenant. They agree that the tenant will pay half of the overdue amount immediately, and the landlord will forgive the remaining half, provided the tenant pays future rent on time. This arrangement, where the landlord agrees to cancel a portion of the owed rent, is a conventional remission.

  This demonstrates the term because the landlord and tenant reached a voluntary agreement to reduce the tenant's outstanding financial obligation, rather than the remission being imposed by an external authority.