Ipso facto

Ipso facto is a Latin expression that literally means “by the very fact itself.” In legal parlance, it denotes a situation in which a legal consequence arises automatically upon the occurrence of a specified event, without any further act being required.

The term is frequently used in contracts, particularly in ipso facto clauses, which provide that an agreement automatically terminates or is modified upon, for example, a party’s bankruptcy. It is significant because it enables the parties to manage risk without having to rely on judicial proceedings. In Dutch legal practice, however, its use may be restricted by legislation such as the Bankruptcy Act.