default
Definition
Default means you failed to do something you were legally required to do, most often failing to make a payment on time or breaking another key term of a contract or loan agreement. When you default, the other party gains certain legal rights against you, like demanding the full loan balance immediately or suing you for damages.
Example
If you take out a business loan and miss three consecutive monthly payments, the bank can declare you in default and demand you repay the entire remaining balance at once.
Watch Out
Many contracts have a short grace period before default is officially triggered, so read your agreement carefully to know exactly how much time you have to fix a missed payment before serious consequences kick in.
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.