Loan Workout Boilerplate Provisions

This topic is critical for those who are involved in negotiating and executing workout and forbearance agreements to act preventively in avoiding problems of enforcement down the road.

Workout or forbearance agreements are contracts and subject to normal rules of contract interpretation. Too many lawyers rely on "form" documents, believing that one size fits all. So-called "boilerplate" often remains in document after document until litigated, and lawyers and businesspeople often find that what was assumed to say one thing, actually says another. Moreover, different practice areas involve certain particular issues that further impact on the use of "boilerplate." This topic will help you understand the purposes and construction of relevant and "common" clauses in the workout context, and become more sensitive to the rationale behind the clauses. Failure to understand what is taken for granted, and draft accordingly, can lead to contrary results when challenged in court.