Automatic Application or Required Election Clause Samples
The "Automatic Application or Required Election" clause determines whether certain terms or provisions in an agreement will take effect automatically or only if a party actively chooses to invoke them. In practice, this clause clarifies whether a benefit, right, or obligation is triggered by default or requires a formal notice or action from one of the parties. For example, a contract might specify that a renewal term applies automatically unless a party opts out, or conversely, that a specific remedy is only available if a party elects to use it. This clause's core function is to eliminate ambiguity about how and when contractual provisions are activated, thereby reducing the risk of disputes over whether a party needed to take action to benefit from or be bound by a particular term.
Automatic Application or Required Election. The prepayment/refinancing privilege described in section 11.2 of this Agreement shall apply automatically to each Advance that has a Maturity Date that will occur before the fifth anniversary of the Requested Advance Date specified in the respective Advance Request. With respect to each Advance for which the Borrower has selected a Maturity Date that will occur on or after the fifth anniversary of the Requested Advance Date specified in the respective Advance Request, the Borrower must elect, at the time of requesting the respective Advance, the particular prepayment/refinancing privilege that is to apply to such Advance from between the options described in sections 11.2 and 11.3 of this Agreement.