Here's What You'll Find in this Payment Agreement Template:
A ready-to-use and easy to modify contract template fitted for all payment agreement types. Easy navigation for all sections in accordance with best industry standards and prepared by licensed legal professionals.
Types of payment agreements
- Cars and vehicles
- Farm animal/livestock
- Legal services
- Medical services
- Monthly payment plan
- Late rent (past due)
- Photography services
- Retail store
- School tuition
- Veterinary services
This particular payment agreement contract template can be used by any vendor to initiate an installment payment plan for its customers. This is also used to enable the customer to repay an outstanding amount over a given time frame due to the inability to pay it off at once. It is often tailored to suit the debtor’s financial situation. These types of payments are usually recurrent in nature.
They also require the debtor to make payments via credit/debit cards or through direct deposit to a bank account. It should be noted that there is little or no interest involved in payment plans. This is taken as an incentive on the part of the creditor to accelerate repayment and forestall default.
Elements of a proper payment agreement
Below are the aspects that the agreement should include for it to be legally binding on all parties involved.
Agreement of terms: Both parties must reach an agreement on the repayment plan that is beneficial to both of them. This will ensure that the debtor is comfortable enough to fulfill their part in a timely manner. There are two types of payment plans. It is either for goods or services or for an outstanding balance.
Creation of payment plans: This is a key part of the payment agreement contract. It should contain the following details below for clarity;
- Creditor’s Name and Address: The creditor or vendor’s contact details
- Debtor’s Name and Address: The debtor/customer’s contact details
- Acknowledgment of the Balance Owed: Acceptance of both parties on the amount owed
- Amount Owed: The total amount owed in words and figures.
Interest Rate (if any): For goods or service purchases, a little interest is mostly attached due to the span of repayment. Sometimes depending on the situation and conditions agreed, an outstanding balance plan can also attract little interest.
Repayment Period: This refers to the time frame in which the amount is to be repaid by the debtor/customer.
Payment Instructions and frequency: The method of repayment which could be cash deposits, electronic transfers, or credit/debit cards, how often the repayment is to be made, and how much each payment will be.
Late Payment (if any): Very key in the event of a delay in repayment
Governing Laws in the jurisdiction of operation: The acceptable business laws governing general repayments in the area of operation. This is to protect both the creditor and the debtor in the event of a breach.
Commencement of payment schedule: The creditor can request an automatic cash transfer system originating from the debtor/customer’s account. Another method is through credit/debit card payments. This can be programmed into a payment platform on the creditor’s website.
Release of the debtor: Upon completion of repayment by the debtor/customer, a proper exit or clearance process must be in place. A release form can be signed by both parties to close all transactions relating to the agreement.
Our easy-to-use payment agreement contract template offers the above features. You can modify it to suit your needs depending on the nature of the agreement. Our templates are designed by legal professionals so you can be confident in their viability.