NEGATIVE COVENANT
\nˈɛɡətˌɪv kˈʌvənənt], \nˈɛɡətˌɪv kˈʌvənənt], \n_ˈɛ_ɡ_ə_t_ˌɪ_v k_ˈʌ_v_ə_n_ə_n_t]\
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1. Constraining provision in a debt agreement, like an adhesion contract type. Limits the borrower on stated points, like a ceiling on the executives' salaries, or prohibition on debt acquisition, or tight control on dividend payout. 2. Constraining provision in a deed that limits the land buyer on stated points, like building density per unit of area, size, style, or building price range, or business types allowed. Also known as negative pledge or restrictive covenant.
By Henry Campbell Black
Word of the day
Snake's-head
- Guinea-hen flower; -- so called in England because its spotted petals resemble the scales of a snake's head.