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Loren
Loren, Attorney
Category: Business Law
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Experience:  30 years experience representing clients .
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Hello , We are currently looking for debt investors for

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Hello ,

We are currently looking for debt investors for our enterprise. If we are offering collateral to offset any possible default, can we specify in the contract that the investor can NOT file suit in said occurrence of default and can only retain collateral as their only offset as to a default?
Thank you for using JustAnswer. I am JudgeLaw and I will do whatever I can to answer your question and provide you excellent service.

I am sorry to hear of your dilemma. I realize how frustrating this is for you, but I believe I have information which you will find helpful.

Yes, you can limit remedies available to investors so long as the investors are made aware of the limitation and it is signed off.

Be aware, however, that you can not limit civil remedies for fraud or misconduct, only for the failure of the investment in the normal course of the business. In other words, you are basically telling investors that there is no guaranteed return.

It is my privilege to assist you. Let me know if you need further information.  I hope I have helped you beyond your expectations in the service I have provided to you.  I am here for you.

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Thank you.

JudgeLaw
Loren and 6 other Business Law Specialists are ready to help you
Customer: replied 3 years ago.

GOT IT!


Now, if an investor(s) says no to only collateral as remedy and we decide to go ahead with debt financing contract, they can only sue the company for the amount laned/owed if we clearly specify as such in said contract, correct?


 


That is, lend us 30k, you can only sue for 30k (and other cost like attorney fees can be specified in the contract on whom has to pay, if at all, correct?)


 


Thanks

Thank you, Luis, for following up with me.

Yes, you can limit damages for the failure of the loan to principal and fees, with a waiver for consequential and incidental damages.

You will still want the investors to initial that specific provision.

I hope this helps.

Thank you.

JudgeLaw
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