Acceleration Clause Definition

noun

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.

Webster's New World Law

(law) A provision in a contract that makes all obligations to be performed under the contract due immediately upon a specific occurrence, such as a breach.

Joe was mortified to learn that his failure to make a scheduled car payment triggered an acceleration clause requiring that the entire balance due on the car must be paid immediately.

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