## Facts

- The Williamsons sold a farm to the Wanlasses for $110,975: $1,975 cash, $89,000 from a loan, and a $20,000 installment note secured by a second mortgage.
- The note required monthly payments of $162.42 beginning June 1, 1971, included an optional acceleration clause for missed installments, and stated the makers waived “presentment for payment and notice of non-payment.”
- From June 1971 through mid-1973, the Wanlasses mailed payments; many were late but were accepted and cashed by the Williamsons (15 of 25 payments were late).
- Mrs. Williamson twice told Mrs. Wanlass payments should be on time.
- In February 1973, the parties’ attorney sent a letter referencing delinquencies and cautioning that acceleration might be invoked if late payments continued; the communication was not framed as a definitive final notice.
- Late payments continued, and without additional formal warning the Williamsons stopped accepting checks and sued to accelerate the full unpaid balance.
- After a bench trial, the trial court enforced acceleration and awarded $18,023.50 plus interest and $2,000 in attorney’s fees; the Wanlasses appealed.

## Issues

1. Whether a holder of an installment note with an optional acceleration clause may accelerate the entire debt without giving reasonable notice and a reasonable opportunity to cure when the holder has repeatedly accepted late payments.
2. Whether waiver language for “presentment” and “notice of non-payment” eliminates any obligation to give notice of intent to insist on strict punctuality before accelerating.
3. Whether good-faith limits (including UCC-style standards) constrain a creditor’s election to accelerate under these circumstances.

## Decision

- The Utah Supreme Court reversed the judgment enforcing acceleration and remanded.
- The court held that, on these facts, the Williamsons could not accelerate without providing reasonable notice and a fair opportunity to bring payments current.
- The February 1973 letter did not provide sufficiently clear notice that future late payments would trigger immediate acceleration.
- The court rejected reading the waiver clause as eliminating the need for fair notice of a change from a tolerated course of late payments to strict enforcement.

## Legal Principles

- An optional acceleration clause is subject to a good-faith constraint; acceleration must rest on a good-faith belief that the prospect of payment or performance is impaired (consistent with UCC § 1-208, now § 1-309).
- A creditor’s repeated acceptance of late installments can create a reasonable expectation that lateness will not trigger immediate acceleration absent clear notice to the contrary.
- A waiver of “presentment” and “notice of non-payment” is construed narrowly and does not necessarily waive notice of intent to accelerate after a course of accepting late payments.
- Before invoking acceleration following a pattern of accepting late payments, the holder must give clear, reasonable notice that strict punctuality will be required and allow a reasonable opportunity to cure existing delinquencies.

## Conclusion

The court held that enforcing acceleration after a long pattern of accepting late payments, without clear notice and a reasonable chance to cure, violated the good-faith limits on optional acceleration and required reversal of the accelerated judgment.


Williamson v. Wanlass, 545 P.2d 1145 (Utah 1976)