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In default: Definition, Example and Related Terms

What does it mean to be In default ?

In default is a term used in contract law. It basically means that one party involved in a contract didn't do what they were supposed to do or promised to do according to the contract. It is like breaking a promise you've signed on paper. This failure could be anything from not delivering goods on time, not paying money owed, or not performing a service as agreed. This situation can put the party in default in a tricky situation because the other party may seek to enforce the contract or may be entitled to some form of compensation because of this breach.


  • Key Element Description
    Example 1 A toy manufacturer promised to send a toy shop 500 toy cars by December, just in time for Christmas. If they do not deliver on time, they are in default of the contract.
    Example 2 An software development company was contracted to build an e-commerce website for a business, with the deadline set for February. If they do not deliver by this time, they are in default of the contract.
    Example 3 A caterer is contracted to provide food for an event, but fails to show up, they are then in default of the contract.

Related terms