Self-Help Mechanism | Practical Law

Self-Help Mechanism | Practical Law

Self-Help Mechanism

Self-Help Mechanism

Practical Law Glossary Item 5-503-1904 (Approx. 3 pages)

Glossary

Self-Help Mechanism

For self help in the labor relations context, see self help.
Broadly, a contract provision that permits one party to withhold or suspend its own performance or take some other action for its own benefit if the other party breaches the contract or on other specified conditions. For example, a services agreement may provide that the customer is entitled to offset service credits from its payment to the vendor if the vendor fails to deduct the amount of the credits from its invoiced fees. Alternatively, a contract may include provisions that expressly prohibit self-help remedies by one or both parties.
For information technology contracts, the term "electronic self-help," "technical self-help," or "self-help code" refers to a component or device within a computer software application that enables the software provider to automatically take self help (for example, by suspending or terminating access to the application) to enforce applicable license or other agreement restrictions (such as a maximum number of concurrent users or payment of license fees) against the customer or user. A contract for the sale or license of software may include provisions that either expressly permit or prohibit electronic self help, which may be considered malware.
In the context of real estate, a self-help mechanism is a remedy that can apply to:
  • Tenant evictions. If permitted by state law, self help eviction allows the landlord to enter the leased premises, remove the tenant's property, and change the locks without judicial process. State laws vary greatly on self help. Some states strictly forbid it while others allow it but disfavor it. Where permitted, typically the landlord must not breach the peace.
  • Lease obligations. The landlord or tenant can perform the other party's lease obligation and charge the cost to the defaulting party or offset against rent payments. For state-specific guidance on the availability of self-help remedies for lease defaults, see Real Estate Leasing: State Q&A Tool: Question 18.
  • Loan defaults. A real estate lender often reserves the right in the loan documents to enter and take possession of the property after a borrower default. However, some states prohibit or limit this right without judicial intervention and appointment of a receiver. A lender also risks being considered a mortgagee in possession.