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Covenant

Definition - What does Covenant mean?

A covenant is an agreement between two parties that is typically binding and enforceable by law. Covenants are often made as part of a contract. In a covenant, one party usually agrees to do or refrain from doing something, and the other party agrees under certain conditions or circumstances. If a covenant is broken, legal action can follow.

Justipedia explains Covenant

There are many different types of covenants. A common example of a covenant would be a loan agreement in which one party agrees to borrow $5,000 from another party in order to finance the purchasing of a car. In this situation, the borrower would be called the "covenantor" and the lender would be called the "covenantee". Once the loan agreement containing the covenant is signed, and the loan is given, the borrower would be legally obligated to repay the loan as per the terms of the covenant.

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