Free Trade Credit Agreement Outline Template

Trade Credit Agreement Outline

1. Title of Agreement

  • Trade Credit Agreement

2. Introduction

  • Date of Agreement

  • Parties Involved

    • Lender (Party Extending Credit)

    • Borrower (Party Receiving Credit)

  • Brief description of the purpose of the agreement.

3. Recitals (Background)

  • A statement explaining the reason for entering the credit agreement (e.g., the Borrower is seeking credit for the purpose of purchasing goods or services).

4. Definitions

  • Clear definitions of key terms such as:

    • "Credit Limit"

    • "Interest Rate"

    • "Due Date"

    • "Default"

    • "Goods/Products"

    • "Payment Terms"

    • "Late Fees"

    • "Repayment Period"

5. Credit Terms

  • Amount of Credit: The total amount of credit extended by the Lender.

  • Credit Limit: The maximum credit amount the Borrower can access at any given time.

  • Interest Rate: Specify the rate of interest on the credit, if applicable.

  • Repayment Schedule: How and when the Borrower is required to repay (e.g., weekly, monthly).

  • Payment Method: Accepted methods of repayment (e.g., wire transfer, check, online payment).

  • Currency: Specify the currency in which payments will be made.

6. Terms of Sale

  • Product/Service Description: Detail the goods or services being provided under the credit arrangement.

  • Pricing: Price of goods/services under the agreement.

  • Delivery Terms: How and when goods/services will be delivered.

  • Risk of Loss: Who bears the risk during the transit of goods.

7. Credit Assessment

  • Creditworthiness: Any process for assessing the Borrower’s credit risk, including checks on financial status, history, etc.

  • Documentation: Any documents required from the Borrower (e.g., financial statements, personal guarantees).

8. Payment Terms

  • Due Date: When payments are due (e.g., 30 days from invoice date).

  • Late Payments: Penalties for late payment, including interest and late fees.

  • Early Payment Discount: Any discount offered for early payment.

  • Partial Payments: Handling of partial payments or installment payments.

9. Security/Collateral (if applicable)

  • Security Interest: Any collateral or personal guarantee required for credit.

  • Collateral Description: Specifics about the collateral, if applicable.

  • Rights to Seize Collateral: Conditions under which the Lender may seize collateral.

10. Default and Remedies

  • Events of Default: Circumstances that would trigger a default (e.g., failure to make payments, insolvency, breach of contract).

  • Remedies: Steps the Lender can take in case of default (e.g., demand for full repayment, legal action, seizing collateral).

  • Acceleration Clause: Whether the full amount of credit becomes due upon default.

  • Cure Period: Time allowed for the Borrower to rectify a default.

11. Signatures

Party A:

Party B:

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