Ipso facto clause
An ipso facto clause is a contractual provision that allows one party to the contract to terminate or modify the operation of the contract upon the occurrence of a specified insolvency related event (such as the appointment of an administrator, receiver or liquidator) in respect of another party.
- a clause that entitles a landlord to terminate a lease in the event that an administrator is appointed to the tenant; and
- a right to terminate arising under a loan agreement caused by the borrower making a court application in relation to a proposed creditors’ scheme of arrangement.
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