covenant

An agreed action to be undertaken ( Positive) or not done ( Negative). A breach of a covenant is a default. Bloomberg Financial Dictionary

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A stipulation in a loan agreement which restricts the borrower's freedom of action while the loan is outstanding. Designed to protect the interests of the lender. Dresdner Kleinwort Wasserstein financial glossary

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covenant cov‧e‧nant [ˈkʌvnənt] noun

[countable, uncountable] LAW a formal written agreement to do something or not to do something, or to pay an amount of money:

• We are tied by a covenant which prohibits the stadium from being put to any other use.

• The covenant to pay the rent on the due date is absolutely fundamental.

• Under this ruling, the landlord would not have a claim against the tenant for breach of covenant (= breaking the agreement ) .

— see also deed of covenant

reˌstrictive ˈcovenant [countable] LAW

a covenant where someone agrees not to do certain things:

• Restrictive covenants are the most common legal restriction imposed on the purchaser.

— covenant verb [intransitive, transitive] :

• All the agency's profits are covenanted to third world charities.

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   A promise in a formal agreement that some activity will or will not be carried out. In a debt agreement a breach of covenant may mean that the whole debt is immediately due. Covenants can cover issues as varied as dividend payments, gearing ratios or the amount of working capital.

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Ⅰ.

covenant UK US /ˈkʌv^ənənt/ noun [C or U]

► LAW a part of a formal written agreement in which it is stated what must or must not be done, or in which someone promises to do or pay something: »

The lease contains a covenant that no animals can be kept on the property.

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Any loss of rent may be claimed as damages for breach of covenant (= failure to do as promised).

→ See also DEED OF COVENANT(Cf. ↑deed of covenant), RESTRICTIVE COVENANT(Cf. ↑restrictive covenant), RESTRICTIVE COVENANT(Cf. ↑restrictive covenant)

Ⅱ.

covenant UK US /ˈkʌv^ənənt/ verb [I]

► LAW to officially agree to do or not do something: »

If business premises suffer serious fire damage the landlord usually covenants to reinstate the premises.