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Simple English definitions for legal terms

cross-default clause

Read a random definition: dependent covenant

A quick definition of cross-default clause:

A cross-default clause is a rule in a contract that says if someone doesn't pay back one loan, they also default on another loan. It's like a domino effect where one mistake can cause a lot of problems.

A more thorough explanation:

A cross-default clause is a provision in a contract that states if a borrower defaults on one debt obligation, it will trigger a default on another obligation. This means that if a borrower fails to make payments on one loan, it could cause them to default on other loans they have.

Let's say a company has taken out two loans, one from Bank A and another from Bank B. Both loans have a cross-default clause. If the company defaults on the loan from Bank A, the cross-default clause will be triggered, and the company will also be in default on the loan from Bank B. This means that Bank B can demand immediate repayment of the loan, even if the company has been making payments on time.

Another example could be a landlord who has a cross-default clause in their lease agreement with a tenant. If the tenant fails to pay rent, it could trigger a default on other leases the landlord has with other tenants in the same building.

These examples illustrate how a cross-default clause can have serious consequences for borrowers and tenants. It is important to read and understand the terms of any contract before signing it, especially if it includes a cross-default clause.

cross-collateralization | cross-defendant

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W HER BABY
13:23
saw that, crazy that she cant just hold the fucker in for a day longer
LMFAO
babycat
13:23
gulc going to hell I’m so serious
glovediedthisishismom
13:24
thats definetly horsey on an alt
glovediedthisishismom
13:24
no way any professor did that
13:25
thrifted a vintage burberry suit today and feeling unstoppable
Dkk
13:26
Nice
glovediedthisishismom
13:26
im in the field like a defensive lineman im always in saks 💯
1a2b3c4d26z
13:26
That's awesome
1a2b3c4d26z
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real ones shop at bergdorf
13:28
real ones shop at YMH
triplethread
13:28
i missed another fordham wave
triplethread
13:28
mamas getting denied
JumpySubsequentDolphin
13:29
the bergdorf on 5th Ave in NYC is so
JumpySubsequentDolphin
13:29
it feels like home
Dkk
13:29
I'm at your mommas house rn: https://x.com/Mansavelli_/status/1648073454665572352
triplethread
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im addicted to reacting to all of the decisions
triplethread
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with the emojis
HopefullyInLawSchool
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I shop at Joe
HopefullyInLawSchool
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Joe's
glovediedthisishismom
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i shop at tawget
glovediedthisishismom
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triplethread
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i shop at giant eagle
ForDizzyDJoy
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How did i miss Fordham and American’s wave and I applied in september 🙃
13:33
Lol UC Davis took me of ED and put me in RD
13:34
surprised I didnt get straight denied
HopefullyInLawSchool
13:34
they emailed you/
HopefullyInLawSchool
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?
13:35
@HopefullyInLawSchool: Yea, I just got it
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