A drop-dead date is a firm deadline set in a contract or agreement that if unmet will result in some form of consequences. Usually, a drop-dead date is used when a person or business needs something completed by a certain time, and the penalties of not meeting the drop-dead date incentivize the other party to meet the deadline. The penalty often involves a late fee, releases a party from the contract, or may even result in the party being liable for damages resulting from the delay. For example, a business may hire a contractor to complete a building by a certain date, and if the contractor does not complete by the drop-dead date, the contractor must pay $5,000 for every day late.
[Last updated in July of 2021 by the Wex Definitions Team]