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acceleration clause Finance Definition

A clause in a loan agreement that can be invoked by the lender when the borrower fails to make payments, files bankruptcy, or otherwise breaks a loan agreement. The clause allows the lender to demand that the borrower pay the outstanding loan balance or provide additional collateral.

acceleration clause Law Definition

n

A provision in a contract or in a testamentary or other legal document that, upon the occurrence of specific events, a party’s future interest in certain property will prematurely vest. For example, in many loan or mortgage agreements, provision is made that if some specified event occurs, such as the debtor’s failure to pay an installment, the creditor may declare the entire outstanding balance to be immediately due.