acceleration clause


acceleration clause
A provision or clause in a mortgage, note, bond, deed of trust, or other credit agreement, that requires the maker, drawer or other obligor to pay part or all of the balance sooner than the date or dates specified for payment upon the occurrence of some event or circumstance described in the contract. Such clause operates when there has been a default such as nonpayment of principal, interest, or failure to pay insurance premiums. General Motors Acceptance Corp. v. Shuey, 243 Ky. 74, 47 S.W.2d 968.
U.C.C. No. 1-208 provides that if the provision for acceleration is "at will" such demand must be made only under a "good faith" belief that the prospect of payment is impaired

Black's law dictionary. . 1990.