A provision in a contract pursuant to which a party agrees to perform (an affirmative covenant) or abstain from performing (a negative covenant) a particular act. These provisions are often, but are not required to be, set out in specific sections entitled affirmative covenants, negative covenants and financial covenants.
For a discussion of:
Negative covenants, see Practice Note, Loan Agreement: Negative Covenants (www.practicallaw.com/5-383-3077).
Affirmative covenants, see Practice Note, Loan Agreement: Affirmative Covenants (www.practicallaw.com/6-382-8184).
Financial covenants, see Practice Note, Loan Agreement: Financial Covenants (www.practicallaw.com/3-384-0955).