Definition - What does Defeasance mean?
Defeasance is a stipulation in a legal instrument. It completely or partially voids or nullifies the other requirements set forth in said instrument and usually does so based upon the fulfillment of certain conditions, or the failure to meet certain conditions within a specified time.
Defeasance can also be generically defined as any deed that results in nullification.
Justipedia explains Defeasance
Some of the most common uses of defeasance can be found in financial agreements such as mortgages, bonds and other types of consumer and commercial loans.
Defeasance is also common in family law and estate planning. Examples of its use in this context could be a will in which bequeathal of property or money is voided if the beneficiary fails to meet certain expectations.
Another example of defeasance is a provision in a lease that renders the lease null and void if a tenant damages the premises.