negative covenant

1. Provision in a debt agreement (usually an adhesion contract type) that imposes one or more constraints on the borrower, such as a ceiling on the executives' salaries, prohibition on acquiring more debt, and tight control on level of dividend.

2. Provision in a deed that imposes certain constraints on the buyer of a piece of land, such as density of buildings per unit of area, size, style, or price range of the buildings to be erected, types of businesses allowed. Also called negative pledge or restrictive covenant.