25/7/2021 0 Comments
Drafting a business contract is one of the most important things to do when entering into a partnership or working together with other companies. Irrespective of whether you are the service provider or the service seeker, having a contract is a must. However, a contract isn't a document with just multiple lines but a document that requires the review of each and every clause added within given its importance.
Of all the clauses added, the installment payment agreement is one that helps you understand the payment terms. Prior knowledge of the same prevents disputes or disapproval in the future.
Not sure what an “installment payment agreement” is? Don't worry, this article will help you understand the in and out of an installment payment agreement and the best practices you should follow when creating the contract with the said clause.
What Is An Installment Payment Agreement?
An “installment payment agreement” is one where the entertaining parties clearly outline the nature of engagement between them, the manner in which goods/services are provided by one, and corresponding payments. Often it so happens that companies enter into a mutual agreement where they agree to pay for the goods/services over time. Instead of paying the entire amount in advance or after the completion of the task, the service seeker is expected to pay the fee over an expressed time period. .
This is primarily observed in contracts that have a certain timeline. In simple words, when party “A” requires the services of B after a certain period in time, the payment requirement is invoked. Subscription agreements, such as those on popular many web and mobile apps, are examples of installment payment agreements. Organizations or persons that sign up for the services on a monthly or a biweekly basis must pay accordingly.
Hence, for these kinds of contracts, it is important to have payment made pre or post the delivery. And this constitutes the installment agreement.
In technical terms, the installment agreement has all the points or the clauses adhering to the payment process. Like it could be mentioned that the payment may not be done before the delivery of the goods and quality check by the audit team on arrival or the payment shall be made before the delivery of the goods to confirm their requirement for the store. In either case, the manner and time of releasing payments is clearly mentioned.
How To Draft The Agreement?
Knowing what an installment agreement is isn’t enough. One must be aware of the specifics of the agreement, what all needs to be mentioned, and how.
The first thing to do is to enter the nature of the business. It is necessary that the contract clearly specifies how the one company will serve the other. Whether they seek services or goods monthly or on an ad hoc basis.
The next thing is the payment process.All the conditions on how and when the payment needs to be released must be added in the agreement.
Another thing to add to the agreement is the dispute resolution clause . if the payment is not released and how will this affect the course of business in the future.
Installment payment agreements are a must for businesses that work on a regular basis with the said party. This helps ensure that they all are on the same page and anything said or done is expected and understood.
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Yoel Molina, Esq. (AKA “Mo”)
Yoel “Mo” Molina, I am a lifelong resident of Miami, Fl. I am a graduate of Miami Senior High, Class of 1992, Georgia Institute of Technology, B.S. 1997 and University of Maine School of Law, J.D. 2001. I have been practicing law in Miami Since 2001. I am a former training prosecutor in the Miami-Dade State Attorney’s Office. I have experience in jury trials, appeals, and administrative hearings. I have appeared before judges across the State. My experience ranges from civil litigation matters, collection matters, foreclosure, business and corporate, contracts, real estate, leases and employment matters..
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