breach or default
Definition
A breach or default happens when someone fails to hold up their end of a contract or agreement. If you promised to deliver goods by a certain date, pay a loan on time, or complete a service, and you don't follow through, you have breached or defaulted on that agreement.
Example
If your business took out a loan and missed three monthly payments, the bank would likely declare you in default, which could give them the right to demand the full loan balance immediately.
Watch Out
Many contracts include a short grace period before a missed payment officially counts as a default, so always read your contract carefully to know exactly when you cross that line.
See which terms appear in your contract?
This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.