What is the term used for a clause that specifies payment terms in the event of default?

The term "acceleration clause" refers to a provision included in a contract, particularly in loan agreements, that allows the lender to demand full repayment of the outstanding balance if the borrower defaults on the loan. This clause is crucial because it protects the lender's interests by providing a mechanism to recover funds without having to go through lengthy legal processes. When a default occurs, the acceleration clause triggers the immediate payment of the remaining balance, effectively shortening the loan term and increasing the urgency for the borrower to fulfill their financial obligations.

In contrast, other options do not accurately represent this concept. A preamble clause typically provides introductory information about the contract but doesn't deal with payment terms. A non-default clause would define conditions under which the borrower is not in default but does not specify payment terms regarding default. An amendment clause allows for changes to be made to the agreement itself but does not address the specific consequences of default related to payment. Thus, the acceleration clause is the correct term for specifying payment terms upon default.