A clause in an instrument that allows the date of maturity of the instrument to be prolonged to sometime in the future is referred to as the ________.
A) forestallment clause
B) acceleration clause
C) prepayment clause
D) extension clause

Question

Quizplus · Accepted Answer

An extension clause is a provision in an instrument that allows for the delay or prolonging of the maturity date of the instrument to a later date in the future. This clause is typically useful for borrowers who are unable to make payments on the due date due to various reasons.

A Clause in an Instrument That Allows the Date of Maturity