by Jason M. Gordon | Feb 23, 2025 | Commercial Law: Contract, Payments, Security Interests, & Bankruptcy
What is a Personal Guarantee? A Personal Guarantee is basically a legal promise by an individual that she will pay the debt back if the borrower does not pay. This acts as additional protection to the lender of the debt. One can use a personal guarantee in a credit...
by Jason M. Gordon | Feb 23, 2025 | Commercial Law: Contract, Payments, Security Interests, & Bankruptcy
What is Pari-passu? The literal meaning of pari-passu is “equal footing”. It is a Latin phrase depicting situations in which the management of two or more creditors, assets, obligations, or securities is done without preferring anyone over the other. ...
by Jason M. Gordon | Feb 23, 2025 | Commercial Law: Contract, Payments, Security Interests, & Bankruptcy
What is the Absolute Priority Rule?The absolute priority rule, also known as “liquidation preference”, is a rule that specifies the order in which creditors and shareholders stand to be compensated in case the company undergoes liquidation. Absolute...
by Jason M. Gordon | Feb 23, 2025 | Commercial Law: Contract, Payments, Security Interests, & Bankruptcy
What is a Letter of Indemnity?A letter of indemnity, or indemnity bond, functions similarly to insurance. One party secures a letter of indemnity from a bank to provide to another party with whom they will undertake a transaction. If the party securing the letter of...
by Jason M. Gordon | Feb 23, 2025 | Commercial Law: Contract, Payments, Security Interests, & Bankruptcy
What is a Letter of Credit? A Letter of Credit is a document provided by a credit-worthy bank to give assurance of payment to a seller of goods as long as the seller presents it with the correct documentation. Mostly these letters are utilized in international trade...
by Jason M. Gordon | Feb 23, 2025 | Commercial Law: Contract, Payments, Security Interests, & Bankruptcy
What is an Inflation Adjustment Clause? This is a finance-related clause in a contract. It adjusts the relevant payments based upon annual or periodic inflation. An inflation clause is generally used to adjust prices or payments due. Simple calculations follow an...
