Default by Buyer Clause Samples
The "Default by Buyer" clause defines the consequences and procedures that apply if the buyer fails to fulfill their contractual obligations, such as making payments or accepting delivery of goods or services. Typically, this clause outlines the steps the seller may take in response to the buyer's default, which can include suspending performance, charging interest on overdue payments, or terminating the contract. Its core practical function is to protect the seller by providing clear remedies and recourse in the event the buyer does not meet their commitments, thereby allocating risk and encouraging timely performance.
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Default by Buyer. THE PARTIES HAVE AGREED THAT SELLER’S ACTUAL DAMAGES IN THE EVENT OF A FAILURE TO CONSUMMATE THE SALE DUE TO BUYER’S DEFAULT WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. AFTER NEGOTIATION, THE PARTIES HAVE AGREED THAT, CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, THE AMOUNT OF THE ▇▇▇▇▇▇▇ MONEY IS A REASONABLE ESTIMATE OF THE DAMAGES THAT SELLER WOULD INCUR IN THE EVENT OF BUYER’S DEFAULT. IN THE EVENT BUYER FAILS, WITHOUT LEGAL EXCUSE, TO COMPLETE THE PURCHASE OF THE PROPERTY, THE ▇▇▇▇▇▇▇ MONEY MADE BY BUYER SHALL BE FORFEITED TO SELLER AS LIQUIDATED DAMAGES AND THE SOLE AND EXCLUSIVE REMEDY AVAILABLE TO SELLER FOR SUCH FAILURE. BY PLACING THEIR INITIALS BELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION. THIS SECTION 8.1 IS NOT INTENDED TO LIMIT SELLER’S RIGHTS UNDER SECTIONS 2.2, 2.3 AND 10.2 OF THIS AGREEMENT.
Default by Buyer. In the event Buyer should fail to consummate the transaction contemplated herein for any reason except for (i) any permissible reasons set forth herein or (ii) Seller's default, Seller may demand Escrow Agent to pay the Deposit, if actually paid to Escrow Agent, such sum being agreed upon as liquidated damages for the failure of Buyer to perform the duties, liabilities and obligations imposed upon it by the terms and provisions of this Agreement or Seller may sue for specific performance.
Default by Buyer. If Buyer fails to perform its obligations under this Agreement, Seller may forfeit this Agreement as provided in Iowa Code (Chapter 656), in which case this Agreement shall be deemed null and void and Seller's Attorney shall deliver the Down Payment to Seller, or, at Seller's option, upon thirty days' written notice of intention to accelerate the payment of the entire balance due because of Buyer's default (during which thirty days the default is not corrected), Seller may declare the entire balance immediately due and payable. Thereafter, this Agreement may be foreclosed in equity and the Court may appoint a receiver. Additionally, in the event Purchaser fails to make any payment of the purchase price promptly when the same shall become due as herein specified, or promptly to perform any covenant or agreement herein contained, Sellers may elect to specifically enforce this agreement or to terminate this agreement and retain as liquidated damages any payments theretofore made hereunder by Purchaser; provided that if such payments are inadequate to compensate Sellers for their damages, or no payments have been made, Sellers may exercise their right to sue for damages for Purchaser’s default. Sellers may elect to bring action, or actions, on any intermediate overdue installment or on any payments, or payments made by Sellers and repayable by Purchaser, it being stipulated that the covenant to pay intermediate installments, or to pay items repayable by Purchaser is independent of the covenant to make a deed, and that every such action is any action arising on contract for the recovery of money only, as if the promise to pay had been expressed in a different instrument, and that no such action shall constitute an election not to proceed otherwise as to any subsequent default. No waiver by Sellers of any default on the party of Purchaser shall be construed as a waiver of any subsequent default.
Default by Buyer. If, prior to Closing, Buyer fails to make any payment when it is due or fails to keep any of Buyer's other promises or agreements contained in this Agreement, then Seller will have the right, at Seller's sole option and in addition to any other rights contained herein, to do any one or more of the following:
(a) Seller may cancel this Agreement by giving ▇▇▇▇▇ written notice of cancellation and Seller may keep all sums paid by Buyer under this Agreement as "liquidated damages" (i.e., the amount agreed to by ▇▇▇▇▇ and Seller as properly payable in settlement for breach of contract), and not as a penalty. Without limiting the generality of the foregoing, ▇▇▇▇▇ understands and acknowledges that if Buyer defaults under this Agreement, Seller may keep the Option Deposit in addition to all other sums paid by Buyer under this Agreement. If Seller cancels this Agreement, ▇▇▇▇▇ agrees that it will be difficult and expensive to determine the amount of loss or damage Seller will suffer. This is because of, among other things, ▇▇▇▇▇▇'s commitments relating to the financing of the Project, the effect of default and cancellation of one sale on other unit sales, and the nature of the real estate market in Hawaii. ▇▇▇▇▇ agrees that the sums paid by ▇▇▇▇▇ under this Agreement are a reasonable estimate of a fair payment to Seller for Seller's loss or damage resulting from ▇▇▇▇▇'s default.
(b) Seller may file a lawsuit for damages.
(c) Seller may file a lawsuit for "specific performance" (in other words, a lawsuit to make Buyer keep all of Buyer's promises and agreements, including, without limitation, closing the purchase of the Property).
(d) Seller may take advantage of any other rights which the law allows or which Seller may have under this Agreement. ▇▇▇▇▇ also agrees to pay for all costs, including Seller's reasonable lawyers' fees (for both in-house and outside counsel) and the escrow cancellation fee, which are incurred because of Buyer's default.
Default by Buyer. If Buyer fails to perform its obligations under this Agreement, Seller may forfeit this Agreement as provided in Iowa Code (Chapter 656), in which case this Agreement shall be deemed null and void and Seller's Attorney shall deliver the ▇▇▇▇▇▇▇ Money to Seller, or, at Seller's option, upon thirty days' written notice of intention to accelerate the payment of the entire balance due because of Buyer's default (during which thirty days the default is not corrected), Seller may declare the entire balance immediately due and payable. Thereafter, this Agreement may be foreclosed in equity and the Court may appoint a receiver.
Default by Buyer. Should Buyer fail to close as provided in this Agreement, Buyer will be in default. Upon default by ▇▇▇▇▇, ▇▇▇▇▇▇’s and ▇▇▇▇▇▇’▇ liability hereunder to Buyer shall absolutely cease, and ▇▇▇▇▇▇’▇ shall be entitled to retain the Buyer’s Deposit. If ▇▇▇▇▇ has not paid the Buyer’s Deposit in full or if ▇▇▇▇▇▇’▇ has incurred any expenses due to default by Buyer, and Buyer has made payment(s) to Seller, then, upon notice from ▇▇▇▇▇▇’▇ to the Seller, any payment(s) by Buyer to Seller (“Payments to Seller”) shall be remitted to ▇▇▇▇▇▇’▇ by the Seller and shall be subject to use as reimbursement to ▇▇▇▇▇▇’▇ for any expenses incurred by ▇▇▇▇▇▇’▇ due to default of Buyer. The Buyer’s Deposit and the Payment to Seller shall be apportioned to ▇▇▇▇▇▇’▇ and Seller in the following manner: ▇▇▇▇▇▇’▇ will retain the amount it would have received as the Buyer’s Premium at settlement plus compensation for any expenses it incurred due to default by ▇▇▇▇▇, and ▇▇▇▇▇▇ will retain the remainder. Additionally, ▇▇▇▇▇▇’▇ may resort to any other action or remedy in law or equity that may be available.
Default by Buyer. If Buyer shall fail to perform any of the conditions as provided herein, this Contract shall be terminated and cancelled if such failure is not cured within thirty (30) days after delivery of written notice from Seller to Buyer. In the event of default by Buyer and failure to cure said default within the period hereinabove provided, then Buyer’s interest in the Real Estate shall be extinguished, and all payments made by Buyer herein shall be retained by Seller as liquidated damages. In the alternative, Seller may pursue such other remedies available under law.
Default by Buyer. BUYER AND SELLER HEREBY ACKNOWLEDGE AND AGREE THAT, IN THE EVENT THE CLOSE OF ESCROW FAILS TO OCCUR DUE TO A BUYER DEFAULT (ALL OF THE CONDITIONS TO BUYER’S OBLIGATIONS TO CLOSE HAVING BEEN SATISFIED OR WAIVED), SELLER WILL SUFFER DAMAGES IN AN AMOUNT WHICH WILL, DUE TO THE SPECIAL NATURE OF THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT AND THE SPECIAL NATURE OF THE NEGOTIATIONS WHICH PRECEDED THIS AGREEMENT, BE IMPRACTICAL OR EXTREMELY DIFFICULT TO ASCERTAIN. IN ADDITION, BUYER WISHES TO HAVE A LIMITATION PLACED UPON THE POTENTIAL LIABILITY OF BUYER TO SELLER IN THE EVENT THE CLOSE OF ESCROW FAILS TO OCCUR DUE TO A BUYER DEFAULT, AND WISHES TO INDUCE SELLER TO WAIVE OTHER REMEDIES WHICH SELLER MAY HAVE IN THE EVENT OF A BUYER DEFAULT. BUYER AND SELLER, AFTER DUE NEGOTIATION, HEREBY ACKNOWLEDGE AND AGREE THAT THE AMOUNT OF THE DEPOSIT REPRESENTS A REASONABLE ESTIMATE OF THE DAMAGES WHICH SELLER WILL SUSTAIN IN THE EVENT OF SUCH BUYER DEFAULT. BUYER AND SELLER HEREBY AGREE THAT SELLER MAY, IN THE EVENT THE CLOSE OF ESCROW FAILS TO OCCUR DUE TO A BUYER DEFAULT, TERMINATE THIS AGREEMENT BY WRITTEN NOTICE TO BUYER AND ESCROW HOLDER, CANCEL THE ESCROW AND RECEIVE THE DEPOSIT AS LIQUIDATED DAMAGES AND ESCROW HOLDER SHALL DELIVER THE DEPOSIT TO SELLER NO EARLIER THAN THREE (3) BUSINESS DAYS AFTER ESCROW HOLDER’S AND BUYER’S RECEIPT OF SELLER’S NOTICE; PROVIDED, HOWEVER, IN THE EVENT BUYER DELIVERS A WRITTEN OBJECTION TO SELLER’S NOTICE WITHIN THE TIME PERIOD SET FORTH ABOVE, ESCROW HOLDER SHALL NOT RELEASE THE DEPOSIT TO SELLER UNTIL SUCH TIME THAT JOINT DIRECTION IS ISSUED BY THE PARTIES, OR IN CONNECTION WITH ESCROW HOLDER FILING AN INTERPLEADER ACTION IN A COURT OF GENERAL JURISDICTION IN THE COUNTY OR CIRCUIT WHERE THE PROPERTY IS LOCATED. SUCH PAYMENT OF THE DEPOSIT TO SELLER IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER AND SHALL NOT BE DEEMED TO CONSTITUTE A FORFEITURE OR PENALTY. NOTHING IN THIS SECTION 13.1 SHALL (A) PREVENT OR PRECLUDE ANY RECOVERY OF ATTORNEYS’ FEES OR OTHER COSTS INCURRED BY SELLER PURSUANT TO SECTION 15.5 OR (B) IMPAIR OR LIMIT THE EFFECTIVENESS OR ENFORCEABILITY OF THE INDEMNIFICATION OBLIGATIONS OF BUYER CONTAINED IN SECTION 4.3.1 AND SECTION 14 HEREOF. SELLER AND BUYER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTAND THE PROVISIONS OF THIS SECTION 13.1 AND BY THEIR INITIALS IMMEDIATELY BELOW AGREE TO BE BOUND BY ITS TERMS. Seller’s Initials: /s/ CJS Buyer’s Initials: /s/ RW
Default by Buyer. Should Buyer fail to close as provided in this Agreement, Buyer will be in default. Upon default by Buyer, Seller’s and Motley’s liability hereunder to Buyer shall absolutely cease, and Motley’s shall be entitled to retain the Buyer’s Deposit. If Buyer has not paid the Buyer’s Deposit in full or if Motley’s has incurred any expenses due to default by Buyer, and Buyer has made payment(s) to Seller, then, upon notice from Motley’s to the Seller, any payment(s) by Buyer to Seller (“Payments to Seller”) shall be remitted to Motley’s by the Seller and shall be subject to use as reimbursement to Motley’s for any expenses incurred by Motley’s due to default of Buyer. The Buyer’s Deposit and the Payment to Seller shall be apportioned to Motley’s and Seller in the following manner: Motley’s will retain the amount it would have received as the Buyer’s Premium at settlement plus compensation for any expenses it incurred due to default by Buyer, and Seller will retain the remainder. Additionally, Motley’s may resort to any other action or remedy in law or equity that may be available.
Default by Buyer. (a) Except with respect to the Estimated Settlement Date, time is of the essence in this Agreement.
(b) Should Buyer:
(i) Fail to make any payments as specified, or
(ii) Furnish false or incomplete information to Seller, Seller’s agent or the mortgage lender, concerning Buyer's legal or financial status, or fail to cooperate in the processing of the mortgage loan application, which acts would result in the failure to obtain the approval of a mortgage loan commitment, or
(iii) Violate or fail to fulfill and perform any other terms or conditions of this Agreement, then in such case, all deposit money and other sums paid by Buyer on account of the purchase price, whether required by this Agreement or not, may be retained by Seller:
1. On account of the purchase, or
2. As monies to be applied to Seller's damages, or
3. As liquidated damages for such breach.
(i) As Seller may elect, and in the event that Seller elects to retain the monies as liquidated damages in accordance with this Paragraph 17 Seller shall be released from all liability or obligations and this Agreement shall become NULL AND VOID and all copies will be returned to Seller's agent for cancellation.