BILLS AND NOTES-ACCELERATION PROVISIONS IN NEGOTIABLE PAPER

Authors

Abstract

The defendant, acceptor, claimed that the trade acceptance sued upon was non-negotiable. This trade acceptance was payable at a specified date, but provided for accelerated maturity in case the acceptor should suspend payment, give a chattel mortgage, suffer fire loss, dispose of his business, or fail to meet at maturity any prior trade acceptance. The defendant claimed that in order to preserve negotiability the contingencies specified in the acceleration clause must be such that their happening will be brought about by some act or omission on the part of the acceptor, and that they must relate to some business act incidental to the collection of the instrument. Consequently, the above italicized clauses are destructive to negotiability. Held, such accelerating provisions do not destroy negotiability. People's Finance and Thrift Co. v. Shaw-Leahy Co. (Cal. 1931) 295 Pac. 1072.

Recommended Citation

BILLS AND NOTES-ACCELERATION PROVISIONS IN NEGOTIABLE PAPER, 29 Mich. L. Rev. 924 (1931).
Available at: https://repository.law.umich.edu/mlr/vol29/iss7/12