Ipso facto clause

The Jolly Contrarian’s Glossary The snippy guide to financial services lingo.™ Go Premium Index — Click the ᐅ to expand: Glossary Comments? Questions? Suggestions? Requests? Insults? We’d love to 📧 hear from you. Sign up for our newsletter.

A provision allowing one party to terminate or accelerate a payment if the other party goes bankrupt. Generally invalid under the Bankruptcy Code because a trustee is not bound by any provision that is conditioned on the debtor's insolvency.