As a result of the financial institutions' desire to involve
new players in the game and to speed up the flow of money, loan
transactions and contracts dealing with these transactions are
becoming widespread each passing day. While creating opportunity
for real or legal persons, these institutions are in need of
guaranteeing their interests against the issues that may arise as a
result of loan extension transactions. One of the most common
mechanism used by finance institutions for this objective is
drafting loan agreements with cross-default clauses.
Cross-default is basically a provision in a loan agreement that
puts the borrower in default if the borrower defaults on another
loan. In other words, if the borrower defaults on one loan, he/she
will be deemed to be in default on his/her other loans and the
debts arising from other loans will become immediately due and
payable even if there is no breach of other loans. For example, if
a borrower defaults on his/her bank
