Forfeiture is the loss of property without compensation due to failing to meet contractual obligations or as a punishment for criminal behavior. Under the provisions of a contract, forfeiture refers to the demand by the defaulting party to relinquish ownership of an asset or cash flows from an investment as compensation for the other party’s losses. When required by law as a punishment for illegal or prohibited action, forfeiture procedures can be criminal or civil. Forfeiture proceedings are frequently held in a court of law.