A clause which operates by automatically defaulting a party under Agreement A where it has defaulted under Agreement B. A cross-default provision effectively gives the non-defaulting party under Agreement A the benefit of the default provisions in Agreement B. Cross-default provisions therefore have a domino effect.
+ cross-default
USA
A clause which operates by automatically defaulting a borrower under Agreement A when it defaulted under Agreement B. A cross-default provision effectively gives the lender under Agreement A the benefit of the default provisions in Agreement B. Cross-default provisions therefore have a domino effect.
In contrast to a cross-default, a cross-acceleration clause in Agreement A causes an event of default under Agreement A when the borrower defaults under Agreement B, only if the lender under Agreement B accelerates repayment.
Related links
Practical Law Dictionary. Glossary of UK, US and international legal terms. www.practicallaw.com. 2010.