1

default

play
noun de·fault \ di-ˈfȯlt , dē- ; ˈdē-ˌfȯlt \
Updated on: 11 Sep 2017

Definition of default

1 :failure to do something required by duty or law :neglect
2 archaic :fault
3 economics :a failure to pay financial debts
  • was in default on her loan
  • mortgage defaults
4 a law :failure to appear at the required time in a legal proceeding
  • The defendant is in default.
b :failure to compete in or to finish an appointed contest
  • lost the game by default
5 a :a selection made usually automatically or without active consideration due to lack of a viable alternative
  • remained the club's president by default
  • the default candidate
b computers :a selection automatically used by a program in the absence of a choice made by the user
  • using the default settings
in default of
:in the absence of

Examples of default in a Sentence

  1. The defendant has made no appearance in the case and is in default.

  2. You can enter your own settings or use the defaults.

  3. Which font is the default in that computer program?

Recent Examples of default from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'default.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

Origin and Etymology of default

Middle English defaute, defaulte, from Anglo-French, from defaillir to be lacking, fail, from de- + faillir to fail


2

default

verb

Definition of default

intransitive verb
1 :to fail to fulfill a contract, agreement, or duty: such as
a :to fail to meet a financial obligation
  • default on a loan
b law :to fail to appear in court
c :to fail to compete in or to finish an appointed contest; also :to forfeit a contest by such failure
2 computers :to make a selection automatically in the absence of a choice made by the user
  • The program defaults to a standard font.
transitive verb
1 :to fail to perform, pay, or make good
  • default a loan
2 a :forfeit
  • defaulted the game
b :to exclude (a player or a team) from a contest by default
  • was defaulted from the tournament

defaulter

noun

Examples of default in a Sentence

  1. If the borrower defaults, the bank can take the house.

  2. The program defaults to a standard font.

Recent Examples of default from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'default.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

Origin and Etymology of default


Financial Definition of DEFAULT

default

What It Is

A default is a violation of a promise to pay debt in agreed amounts at agreed times.

How It Works

Let's assume Company XYZ has a line of credit for $10 million from Bank ABC, and $5 million of that line is outstanding. Company XYZ must make a $25,000 monthly payment on the outstanding debt every month.

Company XYZ is having trouble with the launch of its new product and is dealing with a recall on four of its other products. Sales dropped 75% and cash flow dried up, making it hard to make the debt payments. For a few months, Company XYZ makes late payments, and then after six months it stops making payments altogether. Bank ABC declares Company XYZ in default and demands immediate repayment of the $5 million outstanding principal.

This of course is very hard for Company XYZ to handle, and Bank ABC begins the process of seizing the collateral that secured the debt. Without these assets (let's say they're machinery), Company XYZ cannot continue production and thus closes its doors.

In general, there are six events involved in a default (in this example, we assume the borrower has obtained a mortgage for a house from the lender).

1. The borrower signs a contract agreeing to repay the lender over a period of time, usually in predetermined installments.
2. The borrower misses one or more payments.
3. The lender sends the borrower one or more notices of delinquency.
4. The borrower and the lender try to adjust the repayment schedule so that the borrower is more likely to make at least some of the payments until he or she gets back on his feet. (This process is called special forbearance or mortgage modification.)
5. The borrower still misses payments.
6. The lender sends the borrower a notice of default and initiates foreclosure proceedings.

Why It Matters

Defaults are serious matters, and they are far more serious than simply being overdue in a payment (though this can trigger a lender to declare default). Foreclosure occurs when a lender seizes and sells a borrower's collateral when the borrower has failed to repay the lender. The term is most often associated with real estate.

Defaults do long-term damage to a person's credit report and can hinder a company's ability to raise capital in the future. It is important to note that foreclosure laws vary by state, and they affect the order or duration of these steps. It is also important to note that the federal Fair Debt Collection Practices Act affects foreclosure proceedings by stipulating the methods lenders can use to go after bad debts.

Default risk is the chance that a bond issuer will not make the required coupon payments or principal repayment to bondholders. Many things can influence an issuer's default risk and in varying degrees. Examples include poor or falling cash flow from operations (which is often needed to make the interest and principal payments), rising interest rates (if the bonds are floating-rate notes, rising interest rates increase the required interest payments), or changes in the nature of the marketplace that would adversely affect the issuer (such as a change in technology, an increase in competitors or regulatory changes). The default risk associated with foreign bonds also includes the home country's sociopolitical situation and the stability and regulatory activity of its government.



DEFAULT Defined for English Language Learners

default

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noun

Definition of default for English Language Learners

  • : a failure to make a payment (such as a payment on a loan)

  • law : failure to appear in court

  • computers : a setting, option, etc., that a computer uses if you do not choose a different one


default

verb

Definition of default for English Language Learners

  • : to fail to do something that legally must be done; especially : to fail to make the payments you must make on a loan, mortgage, etc.

  • of a computer : to automatically use a particular setting, option, etc., unless you choose a different one


DEFAULT Defined for Kids

1

default

play
noun de·fault \ di-ˈfȯlt \

Definition of default for Students

:failure to do something especially that is required by law or duty If we miss the game, we'll lose by default.

2

default

verb

Definition of default for Students

defaulted; defaulting
:to fail to do something required
  • He defaulted on repaying the money.

Law Dictionary

default

play
noun de·fault \ di-ˈfȯlt, ˈdē-ˌfȯlt \

legal Definition of default

1 :failure to do something required by duty (as under a contract or by law): as
a :failure to comply with the terms of a loan agreement or security agreement especially with regard to payment of the debt
b in the civil law of Louisiana :a delay in performing under a contract that is recognized by the other party
Note: A party whose performance under a contract is delayed is not automatically in default. Rather, the law of Louisiana requires that the other party “put him or her in default” by a written or witnessed oral request for performance, by filing suit, or by invoking a specific provision in the contract. Moratory damages may be recoverable for loss caused by the delay.
2 :failure to defend against a claim in court (as by failing to file pleadings or to appear in court) — see also default judgment at judgment 1a

default

verb

defaulter

noun
in default
:in the condition of having defaulted

Origin and Etymology of default

Anglo-French defalte defaute lack, fault, failure to answer a summons, from defaillir to be lacking, fail, from de-, intensive prefix + faillir to fail



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