A note made in exchange for funds that contains an acceleration clause is not negotiable because the exact value of the note cannot be ascertained.

Question

Quizplus · Accepted Answer

A note can still be negotiable even if it contains an acceleration clause. The negotiability of a note is determined by its ability to meet the requirements set forth in Article 3 of the Uniform Commercial Code (UCC), such as having a fixed amount and being payable to order or to bearer, not by the presence of an acceleration clause. An acceleration clause allows the payee to demand full repayment before the original due date under specific conditions, but it does not prevent the note's value from being ascertainable.

A Note Made in Exchange for Funds That Contains an Acceleration