Master Factoring Agreement Template for Germany

The Master Factoring Agreement serves as the primary contractual framework for businesses seeking to optimize their working capital through factoring arrangements in Germany. This document is essential when a company wishes to establish a continuing relationship with a factoring provider for the sale of its receivables. The agreement comprehensively addresses all aspects of the factoring relationship, including receivables eligibility, purchase price calculations, representations and warranties, and operational procedures, while ensuring compliance with German regulatory requirements. The Master Factoring Agreement is particularly important in the German market, where factoring is subject to specific banking regulations and civil law provisions regarding the assignment of receivables. It provides the necessary legal foundation for both domestic and cross-border factoring arrangements while incorporating specific German legal concepts and requirements.

1. Parties: Identification of the Factor and the Client (Supplier), including full legal names, registration details, and addresses

2. Background: Context of the agreement, nature of the Client's business, and purpose of the factoring arrangement

3. Definitions and Interpretation: Comprehensive definitions of terms used throughout the agreement, including 'Receivables', 'Eligible Receivables', 'Purchase Price', 'Advance Rate', etc.

4. Sale and Purchase of Receivables: Core provisions regarding the assignment and transfer of receivables, including the true sale nature of the transaction

5. Eligibility Criteria: Detailed criteria for receivables that can be purchased under the agreement

6. Purchase Price and Payment Terms: Calculation of purchase price, advance payments, reserves, and fee structure

7. Representations and Warranties: Statements of fact and assurances from the Client regarding their business, receivables, and compliance with laws

8. Operational Procedures: Day-to-day procedures for offering, accepting, and transferring receivables

9. Collection and Servicing: Provisions regarding the collection of receivables, including notification to debtors and payment arrangements

10. Reporting Requirements: Client's obligations to provide regular reports and information about receivables and their business

11. Events of Default: Circumstances constituting default and their consequences

12. Term and Termination: Duration of the agreement and circumstances allowing early termination

13. Confidentiality and Data Protection: Obligations regarding confidential information and compliance with GDPR/BDSG

14. Governing Law and Jurisdiction: Confirmation of German law as governing law and jurisdiction for disputes