Payment Agreement

This Payment Agreement (the “Agreement”) is entered into and made effective upon signature by both Parties (the “Effective Date”).

WHEREAS, the Debtor owes the Debtee a certain debt; and

WHEREAS, the Debtee and the Debtor desire to enter into an agreement to memorialize this debt and an associated payment plan.

NOW THEREFORE, in consideration of the mutual promises, covenants, and conditions contained herein, the Parties agree as follows:

Definitions:

1. In this Agreement following definitions apply;

1. “Debtor” means a person or enterprise that owes money to another party.
2. “Debtee” means one who is owed a debt; a creditor.
3. “Debt” means an amount of money borrowed by one party from another.
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Debt Amount:

1. The Debtor agrees he/she/it owes the Debtee [INSERT AMOUNT] [Currency, e.g. United States Dollars (USD)].
   

1. The Parties hereby agree to the scheduled Payment Plan, found in Exhibit A attached hereto (the "Payment Plan"). The Debtor shall conform to the schedule set and shall pay to the Debtee before or upon due the amount as indicated on the Payments Plan table.
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Payment Method:

1. Payment shall preferably be made to the Debtee in accordance to the mode as indicated in the Payment Plan, but in any case, the Debtor may choose his method of payment to his convenience.
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Release and Indemnification:

1. In consideration for this Agreement, the Debtee hereby releases any other claims against the Debtor in relation to fees and penalties resulting from the deficiency or any damages prior to this Agreement. However, no obligation shall release the Debtor from its obligations herein or limit the rights of the Debtee in relation to this Agreement.
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Acceleration Clause:

1. In the occurrence that the Debtor fails to render payment upon reaching fifteen (15) days after the scheduled Payment Plan, the full amount of the deficiency shall become due and demandable. Any further failure shall give rise to the right to the Debtee to demand for damages.
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Agreement Modifications:

1. No modification of this Agreement shall be considered valid unless made in writing and agreed upon by both Parties.
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Assignment of Rights :

8. The Debtee may transfer or assign this Agreement to a third party provided that a written notice to the Debtor is given. In the event of such assignment, the. assignee may amend the schedule of payment found in this Agreement.
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Severability:

1. ‍Should any provision found in this Agreement be held invalid, illegal, or unenforceable by any competent court, the same shall apply only to the provision and the rest of the remaining provisions hereto shall remain valid and enforceable.
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Waiver.

1. ‍The failure by either Party to exercise any right, power or privilege under the terms of this Agreement will not be construed as a waiver of any subsequent or further exercise of that right, power or privilege or the exercise of any other right, power or privilege.
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Legal Fees.

1. ‍In the event of a dispute resulting in legal action, the successful Party will be entitled to its legal fees, including, but not limited to its attorneys’ fees, collection fees and the like.
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Legal and Binding Agreement.

1. ‍This Agreement is legal and binding in the United States between the Parties as stated above.
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Governing Law and Jurisdiction.

1. ‍This Agreement shall be governed by and construed in accordance with the laws of the [INSERT NAME OF STATE] in which both Parties reside/do business. In the event that the Parties reside/do business in different States, this Agreement shall be governed by [INSERT NAME OF STATE] law.

IN WITNESS WHEREOF, each of the Parties has executed this Agreement, both Parties by its duly authorized officer, as of the day and year set forth below.

Exhibit A

PAYMENT PLAN

Exhibit A

Note: INSERT BELOW RELEVANT PAYMENT METHOD

Payment Method:

Check [INSERT METHOD]

Amount:

$ [INSERT AMOUNT]

Scheduled Date:

[INSERT DATE]

Disclaimer: Template does not constitute any form of legal advice, and the User is at all times encouraged to request external specific legal advice in respect of the execution of legal documents.

Detail payment terms between two parties, including amount, schedule, and more. Use our template to create the contract and store it here on Contractbook.

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What is a payment agreement?

A payment agreement outlines the terms and conditions of a loan. You may use it instead of a loan agreement or alongside that document to ensure both parties are clear on their obligations regarding the repayment of a loan.

Payment agreements are legally binding documents. As such, missing payments or failing to abide by its terms and conditions could see either party in breach of contract and court action taken against them.

Payment agreements can also act as a receipt for payments that have been made or scheduled and can be a helpful communication tool between all parties involved in a loan.

What should be included in a payment agreement?

Your payment agreement should be relatively short and include the following information:

• Both parties’ details: Who is owed the money, and who is repaying the money? Include addresses and contact details so any disputes can be resolved swiftly.
• The amount owed: How much is owed at the point the agreement is signed? Depending on how you use this agreement, you might provide an updated version each time a payment has been made to reflect the new amount outstanding.
• Governing law: Under what jurisdiction will the payment agreement be governed?
• Payment plan details: You can use these either as a receipt-type document or to detail the amount that should be paid and how and when it should be paid. Add the preferred or actual payment method, the amount required or received, and the date it is expected or accepted. Adding a reference number to track whether you quickly receive the cash on time is also a good idea.

When should I use a payment agreement?

Use a payment agreement if you are:

• Planning to lend money to another business or an individual.
• Planning to borrow money from another company or an individual.
• Need to settle an existing debt and want to agree on a payment schedule outside of what was detailed in the original Loan Agreement.
• Want to track payments made by or to your business concerning a loan.

Using a payment agreement helps both parties be clear on how and when payments should be made while also giving visibility on the overall loan term and what proportion of payments consists of principal and interest. A payment agreement can also be helpful if you wish to create an amortization table for factoring payments in or out of your business accounts.

Using a payment agreement is the best way to simplify elements of the loan process and helps both parties stay organized.

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Managing payment agreements can be addressed with an all-in-one contract lifecycle platform like Contractbook. With Contractbook, businesses and agencies can:

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• Automatically embed specific conditions into an agency agreement based on particular details or data inputs. This speeds up crafting customized payment agreements tailored to your exact needs.
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