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Deferred Payment Agreement Template for Canada

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Key Requirements PROMPT example:

Deferred Payment Agreement

"I need a Deferred Payment Agreement for my manufacturing company to allow a key business customer to pay a $250,000 equipment purchase in monthly installments over 24 months, starting March 2025, with the debt secured against the equipment."

Document background
The Deferred Payment Agreement serves as a crucial legal instrument in Canadian business operations, providing a formal structure for managing delayed or installment payments of acknowledged debts. This document is particularly valuable when parties need to establish a modified payment schedule for existing obligations, whether in commercial or consumer contexts. It's commonly used in situations where immediate full payment isn't feasible or when businesses want to offer payment flexibility to their customers. The agreement must comply with Canadian federal legislation, including the Interest Act and Criminal Code interest rate provisions, as well as provincial consumer protection and contract laws. Key components include detailed payment schedules, interest calculations, security arrangements (if any), and default provisions. The document can be customized for various business contexts while maintaining its core legal requirements and protections for all parties involved.
Suggested Sections

1. Parties: Identification of the creditor and debtor, including full legal names, addresses, and any registration numbers

2. Background: Context of the original debt or obligation and the reason for the deferred payment arrangement

3. Definitions: Key terms used throughout the agreement, including payment-related terminology

4. Acknowledgment of Debt: Clear statement of the total amount owed and acknowledgment by the debtor

5. Payment Terms: Detailed structure of the deferred payment plan, including payment amounts, frequency, and duration

6. Interest Rate: Specification of any applicable interest rates, ensuring compliance with the Interest Act and Criminal Code

7. Method of Payment: Accepted payment methods and payment processing details

8. Default Provisions: Consequences of missed payments and definition of what constitutes default

9. Acceleration Clause: Circumstances under which the full amount becomes immediately due

10. Representations and Warranties: Basic statements of fact and promises made by both parties

11. Notices: How formal communications between parties should be made and delivered

12. Governing Law: Specification of Canadian law and relevant provincial jurisdiction

13. Execution: Signature blocks and execution requirements

Optional Sections

1. Security: Include when the deferred payment is secured by specific assets or guarantees

2. Insurance Requirements: Include when insurance is required to secure the payment obligation

3. Early Payment Provisions: Include when early payment options or discounts are offered

4. Assignment: Include when either party needs the right to assign the agreement to other parties

5. Guarantor Provisions: Include when a third party is guaranteeing the payment obligations

6. Force Majeure: Include when specific circumstances might affect payment ability

7. Confidentiality: Include when payment terms or other agreement details should remain confidential

8. Dispute Resolution: Include when specific arbitration or mediation procedures are desired

Suggested Schedules

1. Schedule A - Payment Schedule: Detailed breakdown of payment dates, amounts, and running balance

2. Schedule B - Original Debt Documentation: Copies or details of the original debt agreement or invoices

3. Schedule C - Security Details: Description of any assets or collateral securing the payment obligation

4. Schedule D - Direct Debit Authorization: Banking details and authorization for automatic payments if applicable

5. Appendix 1 - Interest Calculation Method: Detailed explanation of how interest is calculated and applied

6. Appendix 2 - Default Fee Schedule: Schedule of any applicable fees or charges in case of default

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions

































Clauses


























Relevant Industries

Financial Services

Retail

Manufacturing

Construction

Professional Services

Healthcare

Technology

Real Estate

Education

Wholesale Distribution

Agriculture

Relevant Teams

Legal

Finance

Credit Control

Accounts Receivable

Treasury

Risk Management

Collections

Compliance

Commercial Operations

Sales Operations

Relevant Roles

Chief Financial Officer

Finance Manager

Credit Controller

Accounts Receivable Manager

Legal Counsel

Contract Manager

Credit Risk Manager

Treasury Manager

Collections Manager

Financial Controller

Business Development Manager

Sales Director

Compliance Officer

Risk Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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