A covenant is a legally-binding promise made in a deed that can be enforced as a contract. It often involves agreements or restrictions related to financial obligations or land use.
A critical clause in a loan agreement where breaching certain conditions can make the loan immediately repayable. The breaching of any covenant clause, failure to pay, failure to perform other duties and obligations, false representation and warranty, material adverse change, bankruptcy, and alienation of assets all account for events of default.
