acceleration clause

Definition of "acceleration clause"
  1. 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
How to use "acceleration clause" in a sentence
  1. When the borrower missed three consecutive mortgage payments, the acceleration clause was triggered, demanding the full loan repayment.
  2. The bank invoked the acceleration clause in the car loan contract when Bob failed to make his monthly payment.
  3. The sale of the property activated the acceleration clause, requiring immediate payment of the remaining loan balance.

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