A clause in agreement of sale, which gives the lender right to call all sums due and payable in advance of the fixed payment date upon the occurrence of a specified event, such as a sale, default, assignment or further encumbrance of the property. For example, the contract was for X to purchase a piece of land from Y for Rs 20,00,000, to be paid in 5 monthly installments. If X makes the first two payments, but fails to make the third payment, an acceleration clause would require that X must immediately pay Y the entire balance, or lose his right to purchase (without getting a refund of his 8,00,000).
Posted by: JS Holdings
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