When one of the counterparties to an agreement globally may possibly fail to honor its contract,it is known as ________ risk.

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Default risk refers to the possibility that a party to a contract may fail to fulfill its obligations, including the payment of principal and interest on loans or the delivery of goods and services. This risk applies to both loans and other financial instruments, as well as to non-financial contracts, such as supply or service agreements. In the context of international trade, default risk can be particularly challenging due to factors such as political instability, currency fluctuations, and differences in legal systems.

When One of the Counterparties to an Agreement Globally May