Acceleration Clause

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Acceleration Clause

The provision in a credit agreement, such as a mortgage, note, bond, or deed of trust, that allows the lender to require immediate payment of all money due if certain conditions occur before the time that payment would otherwise be due.

The agreement may call for acceleration whenever there is a default of any important obligation, such as nonpayment of principal or interest, or the failure to pay insurance premiums.

acceleration clause

n. a provision in a contract or promissory note that if some event (like not making payments on time) occurs then the entire amount is due or other requirements are due now, pronto. This clause is most often found in promissory notes with installment payments for purchase of real property and requires that if the property is sold then the entire amount of the note is due immediately (the so-called "due on sale clause.") Some states prohibit "due on sale" and always allow the new property owner to assume the debt. (See: acceleration, assumption)

References in periodicals archive ?
1930) (applying this rule to an acceleration clause implied in an installment contract); Hamlin v.
Where there is a subjective acceleration clause and the likelihood of the acceleration of the due date is remote (such as when the lender historically has not accelerated due dates of loans containing similar clauses and the financial condition of the borrower is strong and its prospects are bright), neither current classification nor disclosure is required.
While acceleration clauses provide owners with a leg-up in any lease break negotiation, the advantage is particularly powerful when an owner does not want the tenant to break because the owner can leverage the tenant's liability to its advantage and demand a cash payment for the tenant's departure.
Based on the foregoing the issue remains, how does one differentiate between a subjective acceleration clause and a demand clause?
However, according to the statement, that agreement shouldn't be cancelable by the lender because of a subjective acceleration clause.
The Consideration Warrants include an acceleration clause, which provide that in the event the closing price of GoviEx's common shares is equal to or greater than C$0.
The company said that it is accelerating the expiry date of these warrants pursuant to the acceleration clause as contained in certain outstanding warrant certificates.
The review of DEWA's ratings considers the potential for liquidity pressure due to the triggering of an acceleration clause on its $2 billion Receivables Securitisation Programme that is issued under Thor Asset Purchase Company Limited.