A(n)________ permits the maker to pay the amount due prior to the due date of the instrument.
A) prepayment clause
B) acceleration clause
C) extension clause
D) forestallment clause

Question

Quizplus · Accepted Answer

A prepayment clause allows the maker of the instrument to pay the amount due before the due date. This can benefit the maker by reducing the amount of interest or fees that would otherwise be due. An acceleration clause allows the lender to demand full payment of the instrument if the maker breaches the terms of the agreement. An extension clause permits the due date of the instrument to be moved forward. A forestallment clause is not a commonly used legal term.

A(n)________ Permits the Maker to Pay the Amount Due Prior