Acceleration Clause (Contracts) - Explained
What is an Acceleration Clause in a Contract?
Written by Jason Gordon
Updated at September 24th, 2021
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What is an Acceleration Clause?
An acceleration clause is a contract provision that permits a lender to demand an entire amount owed on a loan when the borrower breaches a loan agreement. Acceleration clause or contract commonly occur in real estate, mortgages, and other loan or debts agreement. Basic criteria for repayment of loan are usually outlined in the acceleration clause.
Back To: COMMERCIAL LAW: CONTRACTS, PAYMENTS, SECURITY INTERESTS, & BANKRUPTCY
Related Topics
- When is a party's Duty of performance?
- What is an Executed contract vs an Executory contract?
- What is Performance, Substantial Performance, and Breach of a contract?
- What is performance of a Divisible Contract?
- When is a party's duty of performance discharged?
- What are conditions to Contract (Precedent & Subsequent)?
- What is tender performance of a contract?
- What are Impossibility and Impracticability
- What is a Frustration of Purpose?
- Waiver or Release from Contract
- Novation
- What is a Breach of Contract?
- What methods exist for resolving a breach?
- What remedies exist for a breach of contract?
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Academic Research
- Consumer Credit by Adhesion Contracts, Shuchman, P. (1961). Temp. L. Rev., 35, 125.
- A people's history of collective action clauses, Weidemaier, W. M. C., & Gulati, M. (2013). Va. J. Int'l L., 54, 51.
- An Analysis of Mortgage Contracting: Prepayment Penalties and the DueonSale Clause, Dunn, K. B., & Spatt, C. S. (1985). The Journal of Finance, 40(1), 293-308.
- Default clauses in debt contracts, Li, N., Lou, Y., & Vasvari, F. P. (2015). Review of Accounting Studies, 20(4), 1596-1637.
- The bail-in problem: systematic goals, ad hoc means, Eichengreen, B., & Ruehl, C. (2001).
- Some Usury Problems in Commercial Lending, Loiseaux, P. R. (1970). Tex. L. Rev., 49, 419.
- Acceleration Clauses in Georgia: Consumer Installment Contracts and the Federal Truth-in-Lending Act, Hewson III, J. M. (1975). Mercer L. Rev., 27, 969.
- Mortgage Prepayment Clauses: An Economic and Legal Analysis, Whitman, D. A. (1992). UCLA L. Rev., 40, 851.
- Use of Due-on Clauses to Gain Collateral Benefits: A Common-Sense Defense, Ashley, P. S. (1974). Tulsa LJ, 10, 590.
- Defaults and Remedies Under International Bank Loan Agreements with Foreign Sovereign Borrowers-A New York Lawyer's Perspective, Ryan Jr, R. H. (1982). U. Ill. L. Rev., 89.
- Financial Contracts and the New Bankruptcy Code: Insulating Markets from Bankrupt Debtors and Bankruptcy Judges, Morrison, E. R., & Riegel, J. (2005). Am. Bankr. Inst. L. Rev., 13, 641.