What is "confession of judgment"

n. a judgment entered after a written confession by the debtor without the expense of ordinary legal proceedings [syn: confession of judgement, cognovit judgment, cognovit judgement]

Confession of judgment is a legal term that refers to a type of contract (or a clause with such a provision) in which a party agrees to let the other party enter a judgment against him or her. Such contracts are highly controversial and may be invalidated as a violation of due process by courts, since the obligor is essentially contracting away his right to raise any legitimate defenses.

Confessions of judgment are permitted in many states. New Jersey and Pennsylvania permit them, among others. Some states, including Michigan, require they be specially labelled or have other procedural requirements. However, according to testimony before an Alaska State Legislature committee, "Confession of Judgment is illegal in Alaska, it's illegal in Pennsylvania in consumer transactions, but not in commercial transactions." A Law Review article distinguishes three groups of state laws, one group comprising seventeen states that make void any agreement to confess judgment entered into before commencement of a suit.

A typical confession of judgment reads, "The undersigned irrevocably authorizes any attorney to appear in any court of competent jurisdiction and confess a judgment without process in favor of the creditor for such amount as may then appear unpaid hereon, and to consent to immediate execution upon such judgment."

Such clauses should be distinguished from liquidated damages clauses, which do not result in binding judgments against the obligor.

A confession of judgment may also be called a cognovit note.