Klingbiel v. Commercial Credit Corp.
United States Court of Appeals for the Tenth Circuit
439 F.2d 1303 (1971)
Vern Klingbiel (plaintiff) bought a car on credit, agreeing to monthly installments under a contract letting the seller accelerate the balance without notice if it felt insecure or Klingbiel defaulted, with Klingbiel then obligated to pay the balance "upon demand" or return the car, and separately giving the seller the right to foreclose or repossess without notice or demand. After the dealership assigned its interest to Commercial Credit Corp. (Commercial) (defendant), Commercial felt insecure and had the car repossessed four days before Klingbiel's first payment was even due, without any prior demand; Klingbiel sued and a jury awarded him $770 in actual damages plus punitive damages equal to double the car's purchase price, which Commercial appealed.
Whether a security agreement may include a provision giving the secured party a right to accelerate payment if it feels insecure or the debtor defaults.