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Due-On-Sale Clauses: Separating Social Interests From Individual Interests, Joseph Gibson, Iii

Vanderbilt Law Review

This Note suggests that courts have failed to articulate properly the relation of the due-on-sale clause to the legal doctrines under which it has been challenged. In particular, courts that have considered the clauses to be restraints on alienation have concentrated on the impact of enforcement or nonenforcement on the borrower, and have ignored almost completely the social interest in the free transferability of land, which has been the traditional rationale for the rule against restraints. Likewise, courts that have considered due-on-sale clauses under equitable principles frequently have failed to articulate whether the inequity arises from an attempt by one …