The Available Commitment and Cancellation Clause Samples

The "Available Commitment and Cancellation" clause defines the amount of credit or funds that remain accessible to a borrower under a loan or credit facility, and outlines the circumstances under which this commitment can be reduced or cancelled. Typically, this clause specifies how the available commitment decreases as the borrower draws down funds or if certain events occur, such as a default or a lender's decision to reduce exposure. Its core practical function is to provide both parties with clarity regarding the remaining funds available and the conditions under which the lender may limit or withdraw its commitment, thereby managing financial risk and expectations.