ACCELERATION CLAUSE Meaning and
Definition
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An acceleration clause is a provision typically incorporated in a contract, specifically in loan agreements or mortgages, which grants the lender the authority to demand immediate repayment of the entire outstanding balance if certain conditions outlined in the agreement are not met by the borrower or if a default occurs. This clause is designed to protect the lender's interests by providing them with the option to accelerate the repayment schedule.
When triggered by specific events, such as a missed payment, a breach of contract, or a decline in the borrower's financial condition, the acceleration clause empowers the lender to invoke the acceleration provision. Once invoked, the lender can demand full and immediate repayment of the principal balance, any accrued interest, or any other outstanding amounts owed under the agreement.
The purpose of including an acceleration clause is to deter potential default and ensure that the lender can recover the funds lent in a more expedited manner. By accelerating the repayment schedule, the lender can mitigate the risk of non-payment and potential losses. It serves as a protective measure that grants the lender the ability to take swift action when certain conditions are not met, providing them with stronger legal rights to recover their investment.
Common Misspellings for ACCELERATION CLAUSE
- zcceleration clause
- scceleration clause
- wcceleration clause
- qcceleration clause
- axceleration clause
- avceleration clause
- afceleration clause
- adceleration clause
- acxeleration clause
- acveleration clause
- acfeleration clause
- acdeleration clause
- accwleration clause
- accsleration clause
- accdleration clause
- accrleration clause
- acc4leration clause
- acc3leration clause
- accekeration clause
- acceperation clause
Etymology of ACCELERATION CLAUSE
The etymology of the word "acceleration clause" can be broken down as follows:
1. Acceleration: The word "acceleration" originates from the Latin word "acceleratio", which is the past participle of the verb "accelerare". It is derived from the prefix "ad-" meaning "to" or "toward", and the verb "celerare" meaning "to speed up" or "to hasten". The term "acceleration" refers to the act of increasing speed or rate, or the rate at which a velocity changes over time.
2. Clause: The word "clause" is derived from the Old French term "clausule" or "clausula", which ultimately traces its roots back to the Latin word "clausula", meaning "closing" or "a closing part".
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