Failure to honour the terms of an agreement.
For example, failure to honour the terms of a loan agreement, or an obligation under a futures contract.
2. Borrowing and lending - documentation.
In borrowing and lending, default clauses are the part of the documentation that protect the investor (lender).
Accordingly default clauses are incorporated into loan agreements and bond indentures.
Examples of default by a borrower include failure to pay interest or principal on time, and breaching a covenant.
3. Systems design - behavioural economics - decision making.
'By default', or a 'default position', means a choice or determination that is made, when no other positive decision or initiative has been taken.
- Taxation in Qatar
- "There are two separate tax regimes in operation in Qatar and an entity is under the remit of only one regime.
- By default an entity is under the State of Qatar regime.
- Alternatively, an entity is under the remit of the Qatar Financial Centre (QFC) regime if the entity is licensed with the QFC."
- Qatar - the Treasurer's Wiki
Another example of a default position is the cognitive status quo bias to favour pre-existing conditions or choices, whatever they are.
- Bond indenture
- Breach of covenant
- Credit default swap
- Credit event
- Cross default
- Debt distress
- Default bias
- Defaulting lender
- Default fund
- Event of default
- Exposure At Default
- Finance party default
- Financial covenant
- Forward contract
- Futures contract
- Grace period
- Lehman provisions
- Loss Given Default
- Loan agreement
- Non-performing loan
- Qatar Financial Centre
- Variation margin