A term providing that one party or that party’s successor in interest may accelerate payment or performance or require collateral or additional collateral “at will” or when the party “deems itself insecure,” or words of similar import, means that the party has power to do so only if that party in good faith believes that the prospect of payment or performance is impaired. The burden of establishing lack of good faith is on the party against which the power has been exercised.
(Added by renumbering Section 1208 by Stats. 2006, Ch. 254, Sec. 27. Effective January 1, 2007.)
Terms Used In California Commercial Code 1309
- Good faith: except as otherwise provided in Division 5 (commencing with Section 5101), means honesty in fact and the observance of reasonable commercial standards of fair dealing. See California Commercial Code 1201
- Term: means a portion of an agreement that relates to a particular matter. See California Commercial Code 1201