default
di-FAWLT
/dɪˈfɔːlt/
Failure to fulfill an obligation, especially to repay a loan, appear in a court of law, or complete a task.
In finance, it refers specifically to missing a scheduled payment or breaching a loan covenant, triggering penalties or foreclosure.
The story behind the word. From the Old French 'defaute,' meaning a lack or failure. It entered English as a legal term for failing to appear in court when summoned, and later expanded to financial failures.
Word relationships
- nonpayment: Nonpayment is simply not paying, while default is the broader legal state of failing to meet any contractual term.
- delinquency: Delinquency is being late on a payment, whereas default is a more permanent, severe state of contractual failure.
- compliance: Fulfilling all terms and conditions of an agreement.
- repayment: The act of paying back a loan in full according to the terms.
Commonly confused with
- defect: A defect is a physical flaw in an object, while a default is a failure to perform a duty.
Word family
- defaulter (noun): A person who fails to pay a debt or attend court.
Collocations
- default on a loan
- default judgment
- default rate
- in default
Idioms & expressions
- by default
Example sentences
- "The company was forced into bankruptcy after it suffered a default on its major bond payments." A corporate debt crisis.
- "Because the defendant failed to appear, the judge entered a default judgment for the plaintiff." A legal proceeding.
Memory hook
Think of 'De-Fault'. It is 'your fault' (fault) that you 'de-parted' (de) from your payment plan. If you default, it is your financial fault.
When not to use
Do not confuse with a simple mistake or error; default is a formal failure to meet a legal or financial obligation.
Fun facts
- In computer science, 'default' refers to a pre-selected option because it is what the system falls back on when the user 'fails' to specify an alternative.
Explore more words
Breach, deficit, defect, liability, dereliction, Foreclosure
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