Optional Repurchase of Defaulted Contracts Clause Samples
The "Optional Repurchase of Defaulted Contracts" clause allows one party, typically the seller or originator, to buy back contracts that have gone into default. In practice, this means that if a contract within a portfolio fails to perform—such as a loan that is not being repaid—the party with the repurchase option can choose to reacquire the defaulted contract from the other party, often at a predetermined price or under specified conditions. This clause serves to manage and allocate the risk of default, providing a mechanism for removing non-performing assets from a portfolio and offering reassurance to the party holding the contracts.
Optional Repurchase of Defaulted Contracts. The Servicer may, but shall have no obligation to, repurchase a Defaulted Contract, which was originated by DFS, at any time, at a price equal to the Contract Principal Balance for such Defaulted Contract; provided that the aggregate amount of repurchases made under this section shall not exceed an amount equal to 15% of the aggregate Contract Principal Balance of the Contracts originated by DFS as of the Cut-off Date.
Optional Repurchase of Defaulted Contracts. The Servicer may, but shall have no obligation to, repurchase a Defaulted Contract, at any time, at a price equal to the Contract Principal Balance for such Defaulted Contract; provided that the aggregate amount of repurchases made under this section shall not exceed an amount equal to [__]% of the Initial Contract Pool Principal Balance.