A confession of judgment clause is a contractual provision where a party agrees in advance to let the other party obtain a court judgment against them without notice or a hearing in the event of a default, effectively waiving their right to a trial. This clause is typically designed to expedite the collection process but can be controversial due to concerns over due process rights.
(d) Confession of Judgment. In addition to, and not in limitation of, the Holder’s other remedies under applicable law, including as provided herein, upon an Event of Default the Holder shall be entitled to file with the appropriate court of law the Affidavit of Confession of Judgment executed by the Company in connection with issuance of the Note, in the form attached as Exhibit B hereto.
Confession Of Judgment. In The Event Of Any Default Under This Instrument, Including, But Not Limited To Any Payment Under This Instrument Not Being Paid When Due, Whether At Maturity, By Acceleration Or Otherwise, Borrower Hereby Irrevocably Appoints And Constitutes Dawn Dibenedetto Whose Address Is 400 N 8Th Street, Suite 1150, Richmond, VA 23219, Borrower’s Duly Constituted Attorney-In-Fact To Appear In The Clerk’s Office Of The Circuit Court For City Of Richmond, Virginia Or In Any Other Court Of Competent Jurisdiction, And To Confess Judgment Pursuant To The Provisions Of Section 8.01- 432 Of The Code Of Virginia Of 1950, As Amended, Against Borrower For All Principal And Interest And Any Other Amounts Due And Payable Under This Instrument As Evidenced By An Affidavit Signed By An Officer Of The Lender Setting Forth The Amount Then Due, Together With Attorney’s Fees And Collection Fees As Provided In This Instrument (To The Extent Permitted By Law).
Confession Of Judgment. The Undersigned Hereby Irrevocably Authorizes And Empowers Any Attorney-At-Law To Appear In Any Court Of Record And To Confess Judgment Against The Undersigned For The Unpaid Amount Of This Note As Evidenced By An Affidavit Signed By An Officer Of Lender Setting Forth The Amount Then Due, Together With All Indebtedness Provided For Therein (With Or Without Acceleration Of Maturity), Plus Attorneys’ Fees Of Ten Percent (10%) Of The Total Indebtedness Or Five Thousand Dollars ($5,000.00), Whichever Is The Larger Amount For The Collection, Which Borrower And Lender Agree Is Reasonable, Plus Costs Of Suit, And To Release All Errors, And Waive All Rights Of Appeal.
On behalf of the Borrower, I hereby confess judgment in favor of AUCTUS FUND, LLC, a Delaware limited liability company (“Auctus”), with its address at 545 Boylston Street, 2nd Floor, Boston, MA 02116, in the amount of $2,400,000.00, less any payments made on or after the date of this affidavit of confession of judgment, plus Default Interest (as defined in the Note (as defined herein)) on said amount and all other applicable penalties under the Note. In no event shall interest payable hereunder exceed the maximum permissible under applicable law.
3. In order to secure these obligations, Borrower agreed to simultaneously deliver with the execution of the Note this Affidavit of Confession of Judgment.
4. The sums confessed pursuant to this affidavit of confession of judgment are justly due and owing to Auctus under the following circumstances: Borrower entered into the Note pursuant to which Borrower promised to pay to the order of Auctus the principal sum of $2,400,000.00 plus interest as provided for therein. The amounts confessed by this affidavit represent a senior secured promissory note investment by Auctus in Borrower and arise out of Borrower’s breach of its obligations under the Note.
5. Borrower agrees to pay any and all costs and expenses incurred by Auctus in enforcing the terms of this affidavit of confession of judgment, including reasonable attorneys’ fees and expenses at the rate of $475.00 per hour that Auctus incurs or is billed for in connection with enforcing the terms of the affidavit of confession of judgment, entering any Judgment, collecting upon said Judgment, and defending or prosecuting any appeals.
A Confession of Judgment is a legal process where a party agrees in advance to let another party obtain a judgment against them without notice or a hearing. This is typically used to sidestep lengthy legal proceedings in the event of a default or breach of a contract. By agreeing to it, the debtor consents to the creditor obtaining a judgment without the usual due process.
You should consider using a Confession of Judgment:
To write a Confession of Judgment, ensure that the document:
Example:
“I, [Debtor’s Name], agree and confess judgment in favor of [Creditor’s Name] for the sum of [Amount], acknowledging this debt and consenting to the entry of judgment without prior notice.”
Confession of Judgment clauses are typically found in:
It is crucial for parties to be fully informed and to seek legal advice when entering contracts with confession of judgment clauses, given their significant impact on legal rights.
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