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Payment Agreement Letter

Payment Agreement Letter Template for United Arab Emirates

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Key Requirements PROMPT example:

Payment Agreement Letter

"I need a Payment Agreement Letter for my Dubai-based construction company to receive AED 500,000 in six monthly installments from March 2025, with the client providing a bank guarantee as security."

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Document background
A Payment Agreement Letter is a crucial document used in the United Arab Emirates when parties need to formally document payment obligations and terms. This document is particularly valuable in situations involving debt settlement, installment payments, or any scenario where one party agrees to pay another party a specified amount under defined terms. The letter must comply with UAE Federal Law No. 5 of 1985 (Civil Code) and other relevant legislation, while considering local business practices and Sharia principles. It typically includes essential details such as party information, payment amounts, schedule, methods of payment, and consequences of default. The document serves both as a formal acknowledgment of debt and a legally binding agreement that can be enforced under UAE law.
Suggested Sections

1. Letter Header: Date, recipient's name and address, and subject line identifying this as a Payment Agreement Letter

2. Parties Introduction: Clear identification of both parties including full legal names, addresses, and any relevant registration numbers

3. Outstanding Amount: Clear statement of the total amount owed, including any breakdown of principal, interest (if applicable under UAE law), and other charges

4. Payment Terms: Detailed explanation of how and when payments will be made, including payment schedule, method of payment, and currency

5. Default Provisions: Consequences of missing payments or breaching the agreement

6. Acknowledgment: Statement acknowledging the debt and commitment to pay

7. Closing and Signature: Formal closing, space for signatures of both parties, and date

Optional Sections

1. Interest Statement: Include only if interest is being charged and ensures compliance with UAE and Islamic banking principles

2. Security/Collateral: Include if any assets are being provided as security for the payment

3. Governing Law: Include for clarity especially if parties are from different emirates or if international elements are involved

4. Dispute Resolution: Include when parties want to specify particular courts or arbitration methods

5. Witness Section: Include when additional verification of the agreement is desired or required

Suggested Schedules

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

2. Supporting Documents: Copies of relevant invoices, purchase orders, or other documents evidencing the debt

3. Bank Details: Complete banking information for making payments

4. Security Details: If applicable, details of any collateral or security provided

Authors

Alex Denne

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

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alex.den.21@genieai.co
Relevant Industries

Banking and Financial Services

Real Estate

Construction

Retail

Manufacturing

Professional Services

Healthcare

Education

Technology

Trading and Distribution

Hospitality

Logistics and Transportation

Relevant Teams

Finance

Legal

Accounts Receivable

Treasury

Credit Control

Collections

Risk Management

Operations

Compliance

Contract Administration

Relevant Roles

Chief Financial Officer

Finance Manager

Accounts Receivable Manager

Credit Controller

Collections Manager

Financial Controller

Treasury Manager

Legal Counsel

Contracts Manager

Business Development Manager

Account Manager

Risk Manager

Company Director

General Manager

Operations Manager

Industries
UAE Federal Law No. 5 of 1985 (Civil Code): Governs contracts, obligations, and civil transactions. Particularly relevant articles cover formation of contracts, payment obligations, and terms of settlement.
UAE Federal Law No. 18 of 1993 (Commercial Code): Regulates commercial transactions and business dealings, including provisions for commercial papers and payment obligations between businesses.
UAE Federal Law No. 14 of 2018 (Central Bank Law): Governs banking operations and financial institutions, relevant for payment methods and banking transactions.
UAE Federal Law No. 19 of 2018 (Foreign Direct Investment Law): May be relevant if the payment agreement involves international parties or cross-border transactions.
UAE Federal Law No. 4 of 2000 (Capital Markets Law): Relevant if the payment involves securities or financial market instruments.
UAE Federal Law No. 20 of 2018 (Anti-Money Laundering Law): Must be considered for compliance in payment arrangements, especially for large sums or international transfers.
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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