Acceleration Clause
Legal Definition and Related Resources of Acceleration Clause
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Meanings, Synonyms, Etymology, Translations and More
Meaning of Acceleration Clause
The term is often used in reference to contracts for payment of money in what is usually called an acceleration clause by which time for payment of the debt is advanced because of breach of some condition such as failure to pay interest when due. Acceleration clauses are often bargained for elements of mortgages and notes to protect the mortgagee from risks connected with the transfer of the mortgaged property.
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Acceleration Clause in Historical Law
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Legal Abbreviations and Acronyms
Search for legal acronyms and/or abbreviations containing Acceleration Clause in the Legal Abbreviations and Acronyms Dictionary.
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See also
An essential statement contained in a contract (in U.S.... (Read more)
What does Acceleration clause mean in American Law?
The definition of Acceleration clause in the law of the United States, as defined by the lexicographer Arthur Leff in his legal dictionary is:
A provision [in] an instrument of debt stipulating that upon any default in the performance of the obligations of the debtor, the whole debt will, at the creditor's option or automatically, become immediately due. Such a clause may operate quite harshly, for it is frequently the case that the debtor is able shortly to remedy his default but is in no position immediately to discharge the entire obligation. Hence there has been some statutory activity, especially in the context of consumer transactions,
looking toward guaranteeing the debtor some time to make good his default without being subjected to the full rigor of the acceleration clause. Of course, creditors have much of the time forgone implement[ing] the clause when the circumstances of the debtor's breach seemed to justify leniency. See also acceleration of maturity.
For the treatment of the equivalent of acceleration clauses in real property mortgages, see equity of redemption.
Concept of Acceleration Clause in the context of Real Property
A short definition of Acceleration Clause: Clause used in an installment note and mortgage (or deed of trust), which gives the lender the right to demand payment in full upon the happening of a certain event, such as failure to pay an installment by a certain date, change of ownership without the lender's consent, destruction of the property (see Waste), or other event which endangers the security of the loan. See also: Alienation Clause.
Concept of Acceleration Clause in the context of Real Property
A short definition of Acceleration Clause: Clause used in an installment note and mortgage (or deed of trust), which gives the lender the right to demand payment in full upon the happening of a certain event, such as failure to pay an installment by a certain date, change of ownership without the lender's consent, destruction of the property (see Waste), or other event which endangers the security of the loan. See also: Alienation Clause.
Meaning of Acceleration Clause
In this law dictionary, the legal term acceleration clause is a kind of the Property, Securities class.
Resources
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See Also
Demand Clause; Insecurity Clause
Bills
Notes
Property
Securities