acceleration clause
- A term in a contract or promissory note that triggers the immediate requirement of payment or performance in full when a specified event, like a missed payment, occurs. Common instances include real estate transactions where the full debt becomes due if the property is sold
- When the borrower missed three consecutive mortgage payments, the acceleration clause was triggered, demanding the full loan repayment.
- The bank invoked the acceleration clause in the car loan contract when Bob failed to make his monthly payment.
- The sale of the property activated the acceleration clause, requiring immediate payment of the remaining loan balance.
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