DEFAULT AND COMPENSATION Clause Samples
The "Default and Compensation" clause defines the consequences and remedies available when one party fails to fulfill its contractual obligations. Typically, this clause outlines what constitutes a default, the process for notifying the defaulting party, and the types of compensation or remedies—such as damages, interest, or set-off rights—that the non-defaulting party may pursue. Its core function is to allocate risk and provide a clear framework for addressing breaches, ensuring that parties understand their rights and obligations in the event of non-performance.
DEFAULT AND COMPENSATION. (a) Should the Buyers default in the payment of the Deposit or the balance of the Purchase Price in the manner and within the time herein specified, or the Buyers otherwise fail to perform their obligations under this Agreement and such failure is not remedied within seven (7) days following receipt of a notice of default from the Sellers to the Buyers, then the Sellers shall have the right to cancel this Agreement. In such event the Deposit if already paid, together with interest accrued thereon, if any, shall be forfeited to the Sellers. If the Deposit has not yet been paid the Sellers shall have the right to receive the amount equivalent to the Deposit from the Buyers. If the Deposit or the amount equivalent to the Deposit does not cover the Sellers’ losses, the Sellers shall have the right to claim further compensation from the Buyers to recover such losses.
(b) Should the Sellers default in the delivery of the Vessel with everything belonging to her in the manner and within the time herein specified, or the Sellers otherwise fail to perform their obligations under this Agreement and such failure is not remedied within seven (7) days following receipt of a notice of default from the Buyers to the Sellers, then the Buyers shall have the right to cancel this Agreement. In such event the Buyers shall have the right to be paid the amount equivalent to the Deposit by the Sellers and the Deposit, if already paid, together with interest accrued thereon, if any, shall be released to the Buyers. If the amount equivalent to the Deposit does not cover the Buyers’ losses the Buyers shall have the right to claim further compensation from the Sellers to recover such losses.
DEFAULT AND COMPENSATION. Should the Buyers fail to fulfil this Agreement, the Sellers have the right to cancel the Agreement, in which case the performance bond shall be forfeited to the Sellers. If the performance bond does not cover the Sellers' loss caused by the Buyers' non-fulfilment of this Agreement, the Sellers shall be entitled to claim further compensation from the Buyers for any loss and for all expenses. If the Sellers should default in the delivery of the Vessel with everything belonging to her in the manner and within the time herein specified, the performance bond shall at once be returned to the Buyers and in addition the Sellers shall, when such default is due to their negligent or intentional acts or omissions, make due compensation for loss caused by their non-fulfilment of this Agreement.
DEFAULT AND COMPENSATION. 9.1 The Transferor hereby undertakes that it will compensate the Transferee according to the Transferee’s demand with respect to the following matters and enable the Transferee to obtain complete, adequate, timely, effective and full compensation any time:
(1) The Transferee has to defend itself from any prosecution, claim, legal litigation, loss, compensation, payment, costs and expenses (including but not limited to professional fees and expenses) due to its acceptance of the Target Assets and any matters that had occurred before the Settlement Date, unless otherwise provided in the Agreement;
(2) From the date of the Agreement to the Settlement Date, in the event that the Transferor holds the Target Assets, any prosecution, claim, legal litigation, loss, compensation, payment, costs and expenses (including but not limited to professional fees and expenses) incurred or suffered as a result of the Transferor’s fault or mistake;
(3) Any prosecution, claim, legal litigation, loss, compensation, payment, costs and expenses (including but not limited to professional fees and expenses) incurred or suffered by the Transferee at any time as a result of any interests, liabilities or responsibilities of the Transferor or its subsidiaries (other than the Transferee and its subsidiaries); and
(4) Any prosecution, claim, legal litigation, loss, compensation, payment, costs and expenses (including but not limited to professional fees and expenses) incurred or suffered by the Transferee at any time as a result of the breach of any stipulations of the Agreement (including but not limited to the above-mentioned warranties) by the Transferor or its subsidiaries (other than the Transferee and its subsidiaries).
9.2 The Transferee hereby undertakes that it shall compensate the Transferor for any actual losses that the Transferor incurs or suffers as a result of the breach of any stipulations of the Agreement by the Transferee.
9.3 Any Party to the Agreement who makes a demand for compensation from the other party pursuant to the Agreement should do so in writing, and should make reasonably detailed explanations of the facts and situation related to that claim.
DEFAULT AND COMPENSATION