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Difference between revisions of "Creditors' Remedies against Debtors (10:III)"
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Creditors' Remedies against Debtors (10:III) (view source)
Revision as of 23:21, 17 August 2019
, 23:21, 17 August 2019→b) Restriction on the Right to Accelerate a Term Debt
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==== b) Restriction on the Right to Accelerate a Term Debt ==== | ==== b) Restriction on the Right to Accelerate a Term Debt ==== | ||
The security agreement may contain an “acceleration clause” that provides that the total amount owing becomes due upon default in payments or | The security agreement may contain an “acceleration clause” that provides that the total amount owing becomes due upon default in payments or on other grounds, such as whenever the secured party has “commercially reasonable grounds” to believe that they may not be repaid or that the collateral is “in jeopardy”. If there is an acceleration clause in the security agreement other than in the case of default payments, the acceleration clause may not be invoked unless this objective test of “commercially reasonable grounds” has been satisfied. A secured creditor has commercially reasonable grounds when they have a reasonable belief that there is a risk of non-payment. This could occur for a variety of reasons including the debtor fleeing the country, being hospitalized or illegal activity taking place on the premises. If the risk is not obvious the creditor must make commercially reasonable efforts to verify their suspicions. Commercially reasonable efforts do not mean best efforts. | ||
==== c) Limitation of the Right of Seizure for Consumer Goods ==== | ==== c) Limitation of the Right of Seizure for Consumer Goods ==== | ||