The term "pursuant to commitment" refers to an obligation that a secured party has when providing an advance or other value. This obligation remains in effect regardless of any subsequent events that may occur, such as a default that is beyond the secured party's control. Essentially, it means that the secured party is still responsible for fulfilling their commitment, even if circumstances change.
This term is commonly used in the context of secured transactions, which are governed by the Uniform Commercial Code (UCC). It is particularly relevant in areas of law that involve financing, such as commercial lending and real estate transactions. Users may encounter this term when dealing with legal documents related to loans, mortgages, or other secured agreements. With the right resources, such as US Legal Forms, individuals can manage these documents effectively.
Here are a couple of examples of abatement:
Example 1: A bank provides a loan to a business to purchase equipment. Even if the business later defaults on the loan, the bank's obligation to provide the loan amount remains valid as it was made "pursuant to commitment."
Example 2: A lender agrees to advance funds for a real estate purchase. If the buyer faces unforeseen financial difficulties later, the lender is still bound to their commitment to provide the funds as agreed. (hypothetical example)
Examples of state differences (not exhaustive):
| State | Variation |
|---|---|
| California | Specific regulations under the California Commercial Code may apply. |
| New York | New York has unique provisions affecting secured transactions. |
| Texas | Texas law may impose additional requirements for secured parties. |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition | Key Differences |
|---|---|---|
| Pursuant to commitment | Obligation of a secured party to fulfill their commitment regardless of events. | Focuses on the secured party's ongoing responsibility. |
| Default | Failure to fulfill a legal obligation, such as failing to make a payment. | Refers to a breach of the commitment, not the commitment itself. |
| Secured transaction | A loan backed by collateral to reduce the risk for the lender. | Broader category encompassing various agreements, including those with commitments. |
If you find yourself dealing with a situation involving "pursuant to commitment," consider the following steps:
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It refers to the obligation of a secured party to fulfill their commitment regardless of any subsequent events.