Common use of Automatic Liquidation Clause in Contracts

Automatic Liquidation. If the Client does not pay for any securities which he purchases or settle any other transaction with respect to securities by the settlement date of the purchase contract, MSSB has the right to liquidate and impose charges on any or all of these transactions without notice to the Client. MSSB may but need not exercise this right on any day after the day on which the right to liquidate first arose. MSSB will not be liable to the Client with respect to securities purchase transactions on which the customer has defaulted on for any loss suffered by the Client as result of any fall in the market price of the securities between the first day the right to liquidate arose and the day it actually sells the securities.