nonsubstitution clause

nonsubstitution clause
A provision in some municipal leases. This lease provision stipulates that if the municipal lessee terminates the lease under a nonappropriation clause, the lessee will not use any other property performing a similar function to that performed by the property covered by the lease for the period of time covered by the lease. The nonsubstitution clause is intended to be a deterrent to termination of the lease contract under a nonappropriation clause. American Banker Glossary

Financial and business terms. 2012.

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  • nonappropriation clause — A provision in some municipal leases. The clause provides that the lease terminates without penalty to the lessee in the event that the municipal lessee fails to appropriate sufficient funds to make required lease payments during the ensuing… …   Financial and business terms

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