An acceleration clause that allows a creditor to call in a full debt payable by instalments can be drafted to operate automatically on default by a debtor, or it can allow the creditor an election to accelerate the debt.

The distinction between automatic and elective acceleration clauses is important because it affects when prescription on

If a loan is repayable in instalments and includes an acceleration clause that if the debtor defaults on paying any instalment, the creditor is entitled on notice to terminate the loan agreement and claim the full balance outstanding, the debt ordinarily only prescribes three years after the date of the notice claiming the full outstanding