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Acceleration Clause

A clause in a contract that states that if a payment is missed, or some other default occurs (such as the debtor becoming insolvent), then the contract is fully due immediately.

A clause in a contract that states that if a payment is missed, or some other default occurs (such as the debtor becoming insolvent), then the contract is fully due immediately.

Here's a typical acceleration clause in a loan contract: miss 1 payment and the agreement to pay at regular intervals is voided and the entire amount becomes due and payable immediately.

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Unless otherwise noted, this article was written by Lloyd Duhaime, Barrister, Solicitor, Attorney and Lawyer (and Notary Public!). It is not intended to be legal advice and you would be foolhardy to rely on it in respect to any specific situation you or an acquaintance may be facing. In addition, the law changes rapidly and sometimes with little notice so from time to time, an article may not be up to date. Therefore, this is merely legal information designed to educate the reader. If you have a real situation, this information will serve as a good springboard to get legal advice from a lawyer.

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