Confession of judgment
A contractual clause in which a merchant agrees in advance to entry of judgment against them on default, without a hearing.
Once widespread in this industry and now heavily restricted — New York curtailed their use against out-of-state defendants after extensive reporting on the practice. They remain a recurring theme in enforcement actions.
Why it matters to a broker
Worth asking any funder directly whether they use them and in which states. The answer says a good deal about how their paper behaves after a default.
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