Definition of acceleration clause

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acceleration clause -- a clause commonly included in mortgages and bonds that gives the holder the right to demand the entire outstanding balance be paid in the event of default. Without this clause, the mortgagee may have to file separate foreclosure suits as each installment of the mortgage debt falls due and is in default.

another definition...

acceleration clause -- A rider, usually contained in an indenture contract, mortgage or other agreement, stipulating that the outstanding balance becomes due for payment if particular defaulting conditions should occur. These include inability to fulfill principal and interest obligations, and failure to pay taxes on hypothecated property.



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Mark McCracken

Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English".


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