What clause is used in leases and mortgages to cancel a specified right under certain conditions?

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The correct answer is the defeasance clause, which is used in leases and mortgages to cancel a specified right when certain conditions are met. In the context of a lease or mortgage, this clause provides the mechanism by which the obligation or right can be nullified, typically when the underlying obligations, such as the payment of a loan or maintenance of the property, have been fulfilled or when certain events occur.

The defeasance clause is significant in the realm of real estate because it essentially allows for the termination of the legal rights associated with a property upon the completion of certain criteria, providing clarity and legal protection for both parties involved. For example, once a borrower has repaid their mortgage in full, the defeasance clause would effectively cancel the lender's right to claim the property.

While other clauses may serve different purposes within leases or mortgages, such as severability clauses that address the validity of parts of a contract, termination clauses that specify when a lease or agreement can be ended, or contingency clauses that introduce conditions that must be met for the contract to remain valid, none encapsulate the concept of canceling a right under specified conditions in the same impactful way as the defeasance clause.

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