Legal Definitions - forbearance

Forbearance refers to the deliberate act of refraining from exercising a legal right, enforcing an obligation, or demanding payment of a debt that is due. It involves intentionally delaying or postponing an action that one is legally entitled to take, often in exchange for a new agreement or a revised plan.

• Example 1: Landlord and Tenant Agreement

  Imagine a tenant who has consistently paid their rent on time for several years suddenly faces an unexpected job loss, making them unable to pay the rent for the upcoming month. Instead of immediately issuing an eviction notice or demanding the full overdue amount, the landlord might agree to a temporary arrangement. They could allow the tenant to pay a reduced rent for two months while they search for new employment, with the understanding that the missed portion will be repaid over the subsequent six months.

  In this scenario, the landlord is exercising forbearance by intentionally delaying the enforcement of their right to receive full, on-time rent payments and their right to initiate eviction proceedings. This delay is often based on a new, mutually agreed-upon plan.

• Example 2: Business Contract Dispute

  Consider a situation where Company X has a contract with Company Y to deliver a specialized component by a specific date. Due to an unforeseen supply chain disruption, Company X realizes they will miss the delivery deadline by three weeks. Under the original contract, Company Y would have the right to impose penalties for late delivery or even terminate the contract.

  However, if Company Y agrees to grant Company X an extension, perhaps in exchange for a discount on the order or a commitment to expedited shipping once the components are available, Company Y is demonstrating forbearance. They are intentionally holding back from enforcing their contractual rights to penalties or termination, opting instead for a revised agreement that accommodates the unforeseen circumstances.