How have the courts interpreted an acceleration clause in a credit agreement?
British Columbia, Canada
The following excerpt is from The Toronto-Dominion Bank v. Rismani, 2015 BCSC 596 (CanLII):
Turning to the first argument, that is to say that the petitioner improperly exercised an acceleration clause and in a manner contrary to s. 16 of the PPSA, I do not accept that proposition. After taking any reasonable interpretation of the aforementioned provision of the credit agreement, it cannot be said that it was an acceleration clause. The agreement is a demand loan. The same can be said of the promissory note wording. As said in CIBC v. Probe, 2003 BCSC 1224, a demand loan is an “at pleasure” loan. There is no requirement that there be a default of some condition.
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