Covenants

Term Main definition
Covenants

The continuing promises in definitive agreements.

These obligate a party either to take an action (referred to as an affirmative covenant) or to refrain from taking an action (called a negative covenant). Some covenants have special names. These include financial covenants which are any covenants that require the maintenance or achievement of some financial measure. Covenants regarding loans are called loan covenants and sometimes called borrowing covenants.