Jurisdiction(s):
United Kingdom

Key definition

Event of default definition

What does Event of default mean? An event of default is a contractually defined trigger that, when it occurs, entitles the non-defaulting party to terminate the contract and/or exercise agreed remedies (for example, accelerate debt, enforce security, suspend performance or step in). It is not a statutory term; its meaning depends on the wording of the contract and is used across finance, commercial and derivatives documentation (for example, LMA loans and the ISDA Master agreement). Typical events include non-payment, breach of covenants or undertakings, misrepresentation, insolvency or insolvency proceedings, cross-default, illegality, change of control and material adverse change. Clauses often require notice, allow a cure or...

Real estate finance events of default: LMA REF guidance, key property and development triggers, and negotiation points

Published by a LexisNexis Banking & Finance expert

Practice notes

Many of the usual events of default for a typical syndicated loan facility will likewise apply, in some form, to a real estate finance transaction. For information about those events of default, including what events of default are and why they are used, see Practice Note: Events of default. This Practice Note considers the kinds of additional events of default commonly seen in real estate finance investment and development transactions.

Purpose of events of default

Instead of relying on general contract law for a remedy where the borrower breaches the loan agreement, most facility agreements incorporate a mechanism by which a lender may, if it chooses, take action when the borrower breaches the loan agreement or when certain other events occur. The events that permit the lender to act are usually set out expressly in the facility agreement and are referred to as 'events of default'.

If an Event of default is continuing, the lender will ordinarily be permitted to take any or all of the following actions:

cancel its commitments
declare all or part of the loans to be (i) payable on demand or (ii) immediately due and payable...

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Web page updated on 22/05/2026

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