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The Collaborative International Dictionary
Defeasance

Defeasance \De*fea"sance\, n. [OF. defesance, fr. defesant, F. d['e]faisant, p. pr. of defaire, F. d['e]faire, to undo. See Defeat.]

  1. A defeat; an overthrow. [Obs.]

    After his foes' defeasance.
    --Spenser.

  2. A rendering null or void.

  3. (Law) A condition, relating to a deed, which being performed, the deed is defeated or rendered void; or a collateral deed, made at the same time with a feoffment, or other conveyance, containing conditions, on the performance of which the estate then created may be defeated.

    Note: Mortgages were usually made in this manner in former times, but the modern practice is to include the conveyance and the defeasance in the same deed.

Douglas Harper's Etymology Dictionary
defeasance

early 15c., from Anglo-French defesaunce, Old French desfaisance "undoing, destruction," from desfaire (Modern French défaire) "to undo, destroy" (see defeat (v.)). Related: Defease; defeasible.

Wiktionary
defeasance

n. 1 (context now rare English) destruction, defeat, overthrow. 2 (context US legal English) The rendering void of a contract or deed; an annulment.

Wikipedia
Defeasance

Defeasance (or defeazance) (, to undo), in law, an instrument which defeats the force or operation of some other deed or estate; as distinguished from condition, that which in the same deed is called a condition is a defeasance in another deed. The term is used in several contexts in finance, including:

  • a clause in a mortgage granting a borrower exclusive ownership in a property after a debt is repaid,
  • a corporate finance technique where a corporate bond issue is repaid through an irrevocable trust, which allows the corporation to remove liabilities from its balance sheet; notably used by Exxon in 1982

A defeasance should recite the deed to be defeated and its date, and it must be made between the same parties as are interested in the deed to which it is collateral. It must be of a thing defensible, and all the conditions must be strictly carried out before the defeasance can be consummated. Defeasance in a bill of sale is the putting an end to the security by realizing the goods for the benefit of the mortgagee. It is not strictly a defeasance, because the stipulation is in the same deed; it is really a condition in the nature of a defeasance.

Usage examples of "defeasance".

But What is equivalent to a demonstration that Glamorgan was conscious that he had no powers to conclude a treaty on these terms, or without consulting the lord lieutenant, and did not even expect that the king would ratify the articles, is the defeasance which he gave to the Irish council at the time of signing the treaty.