Also known as: maturity dates · date of maturity · due date
Written by attorneys · grounded in primary & secondary sources — see below
The date specified in a debt instrument on which the principal amount becomes due and payable. In instruments payable in installments without acceleration, default on an installment causes the instrument to become overdue on that date until cured. Absent acceleration or installment structure, the instrument becomes overdue the day after the stated date.
Monarch Pharmaceuticals issued a promissory note to Meridian Motors for laboratory equipment, payable in twelve equal monthly installments. After Monarch missed the sixth installment, Meridian treated the note as overdue. Meridian then refused to accept a later tender of only the missed payment plus interest, insisting the full balance had matured.
Mustafa Mahmoud borrowed from Matrix Technologies under a note requiring monthly interest payments with principal due in a lump sum at the end of three years. When Mahmoud missed two interest payments but remained current on principal, Matrix could not declare the note overdue. Matrix therefore could not accelerate or enforce remedies based solely on the interest shortfall.
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Nathaniel Norton signed a promissory note to Northern Bank with principal due in a single lump sum on a fixed date and no installment payments. When the due date passed without payment or acceleration, the note became overdue the next day. Northern Bank could then pursue enforcement remedies available only on an overdue instrument.
Malcolm McKinley held a mortgage note with a fixed maturity date that had passed. When he tendered the full principal plus accrued interest, the lender refused and proceeded with foreclosure. McKinley argued the tender occurred after maturity and therefore satisfied the obligation in full.
Meredith Maxwell structured a series of transactions to avoid reporting requirements on funds due at the maturity date of several certificates of deposit. Prosecutors charged her with structuring to evade the reporting obligation that arose once the maturity date passed. The court considered whether her knowledge of the maturity date established the required mental state.
Miles Montgomery granted a mortgage on his commercial property with a fifteen-year term containing an acceleration clause. After default the lender accelerated the full balance, making that date the new maturity. When Montgomery later tendered the full balance, the lender could not refuse payment on grounds the original maturity date had not yet arrived.
The instrument becomes overdue upon default in payment of an installment. It remains overdue until the default is cured. This rule applies when the principal is payable in installments and the due date has not been accelerated.
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No. Unless the due date of principal has been accelerated, an instrument does not become overdue if there is default in payment of interest but no default in payment of principal.
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A contractual provision that cuts off the borrower's right to redeem six months before the maturity date is treated as a clog on the equity of redemption. Courts invalidate such clauses as void against public policy, preserving the right to redeem until foreclosure occurs.
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…a maternity leave policy that required pregnant schoolteachers to take unpaid leave beginning five months before their expected due date. The school board argued that some teachers became physically incapable of performing adequately in the latter stages of their pregnancy, and we accepted this justification for purposes of…