Confessions of Judgment: The Clause Worth Reading Twice

A confession of judgment (COJ) is a clause in which a borrower agrees, in advance, that a court can enter judgment against them without a normal legal proceeding if the funder claims a default. Historically, some advance agreements relied on them heavily.

Why they drew scrutiny

A COJ can compress the usual protections of a dispute into almost nothing. In some cases, businesses learned of a judgment only after accounts were already affected. That imbalance drew significant regulatory and legislative attention, and the landscape has shifted in recent years.

What to do

• Locate the clause in your agreement — it is often near the default and remedies sections.
• Note which jurisdiction the agreement names.
• If you do not understand it, have someone qualified read it with you before you need to.

This is general information, not legal advice. For anything specific to your agreement, a qualified attorney is the right resource.