Payment Agreement Template
This Payment Agreement is entered into as of [Date] by and between [Client.Company], having its principal place of business located at [Client.Address] (the “Owing Party”), and [Sender.Company], having its principal place of business located at [Sender.Address] (the “Owed Party”), both of whom agree to be bound by this Agreement.
WHEREAS, the Owing Party owes the Owed Party [Amount owed] (the “Deficiency”);
WHEREAS, the Owing Party and the Owed Party desire to enter into an agreement whereby the Owing Party shall pay the Owed Party the sum of the Deficiency on a payment plan according to the terms and conditions herein, including the payment methods and the responsibilities of the Owing Party; and
WHEREAS, the Owed Party has determined that the Owing Party can and desires to pay the Deficiency with their current means.
NOW, THEREFORE, in consideration of the mutual covenants and promises made by the parties hereto, the Owing Party and the Owed Party (individually, each a “Party” and collectively, the “Parties”) covenant and agree as follows:
1. Deficiency Acknowledgment
The Owing Party agrees and acknowledges that it owes the Owed Party an amount of money at least equal to the Deficiency as defined above. Nothing in this Payment Agreement is a waiver of any amounts owed and in the event of any breach of this Agreement by the Owing Party, the Owed Party’s rights to the Deficiency shall not be limited. If the Owed Party has agreed to offer the Owing Party a payment plan on an amount lower than the true amount owed, the Owed Party furthermore does not release rights to the total amount owed until and unless the Owing Party completes this payment agreement in full.
2. Owing Party Representation and Warranty
The Owing Party hereby represents and warrants that this Agreement and the payment plan herein has been developed in a manner that the Owing Party reasonably believes it can pay the Owed Party without further interruption, notwithstanding an additional change in circumstances. Should the Owing Party face an additional change in circumstances that impairs their ability to pay according to this Agreement, they do so agree to notify the Owed Party in writing as soon as possible to modify this Agreement to meet their new financial limitations.
3. Payment Plan
The Parties hereby agree to the payment plan as described on Exhibit A attached hereto (the “Payment Plan”). The Owing Party agrees to make the payments to the Owed Party associated with the dates as listed on the Payment Plan. Should the Owing Party choose to make payments larger or earlier than designated in the Payment Plan, the excess funds shall be considered to apply to the next scheduled payment until the total amount owed has been paid.
4. Method of Payment
Payments shall be made to the Owed Party in accordance with the Payment Plan via [Payment method]. No other payment methods shall be accepted unless the Owed Party provides the Owing Party with a written waiver. Any and each waiver releasing the Owing Party to pay with an alternative payment method shall only be applicable to a single scheduled payment unless the waiver states otherwise.
5. Release and Indemnification
In consideration for agreeing to this Payment Agreement, the Owed Party hereby releases any claims against the Owing Party related to the Deficiency as of the date of this Agreement.
However, nothing in this Agreement is meant to release the Owing Party from its obligation to pay the Deficiency according to the Payment Plan herein or limit the rights of the Owed Party in collecting said Deficiency. Should the Owing Party breach the terms of this contract, the Owed Party retains full rights to claim the full amount of the Deficiency.
6. Acceleration upon Breach
In the event that the Owing Party fails to make any payments in accordance with the Payment Plan, upon reaching [Number] ([Number]) days after the failure to make any such prescribed payment, the full amount of the Deficiency shall come immediately due and payable. The Owed Party reserves the right to pursue the Owing Party for the full amount of the Deficiency in a court of law.
The Owed Party may assign this Agreement with written notice to the Owing Party at least [NUMBER] days prior to the assignment. In the event of such assignment, the assignee may designate a new method of payment. The assignee must also provide the Owing Party with written notice regarding the new method of payment or the Owing Party is not bound to pay with any method not listed within this Agreement.
In the event any provision of this Agreement is unenforceable for any reason, then the Parties agree that such provision shall be deemed to be struck, and the remainder of the Agreement shall be enforced as if the struck provision were never included in the Agreement.
Upon a determination that any term is invalid, illegal, or unenforceable, the court making such determination is authorized and instructed to modify this Agreement to effect the original intent of the Parties as closely as permissible to ensure that the Agreements made herein are completed according to the original intent to the fullest extent possible.
10. Governing Law
This Agreement and the interpretation of its terms shall be governed by and construed in accordance with the laws of the State of [State] and subject to the exclusive jurisdiction of the federal and state courts located in [County], [State]. Both Parties herein agree to abide by the laws in this state unless and until both Parties no longer operate in this state, at which point a written modification must be generated to amend this clause.
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
The Owing Party hereby agrees to adhere to the following payment plan or face penalties as described in this Agreement. The payment plan may only be amended with a written waiver provided by one Party and accepted by the other Party in writing. The payment plan for the Deficiency will be as follows:
EXHIBIT B — Notary Acknowledgment
On [Date], before me, [Notary name and title], personally appeared [Client.FirstName][Client.LastName] and [Sender.FirstName][Sender.LastName], who proved to me on the base of satisfactory evidence to be the persons whose names are inscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities. Furthermore, both parties proved to me in a satisfactory manner that by their signatures on this instrument they or the entities upon whose behalf they act agree to execute this instrument.
I certify under PENALTY OF PERJURY under the laws of the State of [STATE] that the foregoing paragraph is true and correct.
Witness my hand and official seal: