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Partial Payment Contract for the United Kingdom

Partial Payment Contract Template for England and Wales

A Partial Payment Contract is a legally binding agreement under English and Welsh law that establishes terms for paying a debt or obligation in installments rather than as a single lump sum. This document outlines the payment schedule, amounts, deadlines, and consequences of default, while ensuring compliance with relevant legislation including the Late Payment of Commercial Debts (Interest) Act 1998 and other applicable laws. It provides protection for both creditor and debtor by clearly defining their rights and obligations throughout the payment period.

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Partial Payment Contract

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What is a Partial Payment Contract?

The Partial Payment Contract is essential when parties need to formalize an arrangement for paying a debt through multiple installments. This contract type is commonly used in England and Wales when full immediate payment isn't feasible or desirable. It provides a structured framework for managing partial payments, protecting both creditor and debtor interests by clearly defining payment terms, schedules, and consequences of default. The document typically includes specific dates, amounts, payment methods, and any applicable interest rates, while ensuring compliance with relevant UK legislation regarding debt collection and payment terms.

What sections should be included in a Partial Payment Contract?

1. Parties: Identifies all parties to the contract with full legal names and addresses

2. Background: Context and purpose of the partial payment arrangement

3. Definitions: Key terms used throughout the agreement

4. Payment Terms: Details of the payment schedule, amounts, and methods

5. Default Provisions: Consequences of missing payments or breaching terms

6. Termination: Circumstances under which the agreement can be terminated

What sections are optional to include in a Partial Payment Contract?

1. Interest Provisions: Provisions detailing interest charges on late payments or outstanding balances

2. Security: Details of any collateral or guarantees securing the payment obligations

3. Force Majeure: Provisions for handling unforeseen circumstances affecting payment ability

What schedules should be included in a Partial Payment Contract?

1. Payment Schedule: Detailed breakdown of payment dates and amounts

2. Calculation of Interest: Method and formula for calculating any applicable interest

3. Security Details: Comprehensive description of any assets or guarantees securing the payments

4. Original Invoice/Debt Documentation: Reference documents showing original amount owed and payment history

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

Jurisdiction

England and Wales

Document Type

Payment Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions






















Clauses
























Industries

Common Law of Contract: Fundamental principles of contract law established through case law in England and Wales, covering formation, consideration, and enforcement of contracts

Law of Property (Miscellaneous Provisions) Act 1989: Section 2 specifies formal requirements for contracts, particularly regarding written formalities for certain types of contracts

Late Payment of Commercial Debts (Interest) Act 1998: Legislation governing interest charges on late commercial payments and providing statutory rights for businesses to claim interest

Late Payment of Commercial Debts Regulations 2013: Regulations implementing EU Directive 2011/7/EU on combating late payment in commercial transactions

Housing Grants, Construction and Regeneration Act 1996: Legislation governing payment provisions in construction contracts, including rules for stage payments and dispute resolution

Consumer Rights Act 2015: Key legislation protecting consumer rights in contracts, including quality of goods, services, and digital content

Consumer Contracts Regulations 2013: Regulations governing distance selling and off-premises contracts, including cancellation rights and information requirements

Consumer Protection from Unfair Trading Regulations 2008: Regulations prohibiting unfair commercial practices and protecting consumers from misleading actions or omissions

Financial Services and Markets Act 2000: Primary legislation regulating financial services industry and financial products in the UK

Consumer Credit Act 1974: Legislation regulating credit arrangements and protecting consumers in credit transactions

Companies Act 2006: Primary legislation governing company formation, operation, and capacity to enter into contracts

Unfair Contract Terms Act 1977: Legislation regulating unfair terms in contracts and limiting the extent to which liability can be excluded

Limitation Act 1980: Legislation setting time limits for bringing legal claims, including claims for breach of contract

Teams

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