Prepayment Agreement Template for Denmark

A Prepayment Agreement is essential in commercial relationships where one party needs to make advance payments before receiving goods or services. This document type is commonly used in Danish business transactions where suppliers require upfront funding for production, development, or service delivery. The agreement provides legal certainty by clearly defining the terms of the prepayment, including payment schedules, usage of funds, reconciliation processes, and refund conditions. Under Danish law, such agreements must comply with the Danish Contracts Act (Aftaleloven) and, where applicable, the Danish Payment Services Act (Betalingsloven). The Prepayment Agreement is particularly important for protecting both parties' interests by establishing clear rights and obligations regarding the prepaid amounts, ensuring transparency in the business relationship, and providing mechanisms for dispute resolution.

1. Parties: Identification of the parties entering into the prepayment agreement, including full legal names, registration numbers, and addresses

2. Background: Context of the agreement, including the business relationship and purpose of the prepayment arrangement

3. Definitions: Key terms used throughout the agreement

4. Prepayment Amount: Specification of the prepayment amount, currency, and payment schedule

5. Payment Terms: Details of how and when the prepayment is to be made, including bank account details and payment references

6. Use of Prepaid Amounts: Description of how the prepaid amounts will be applied to future purchases or services

7. Accounting and Reconciliation: Procedures for tracking and reconciling prepaid amounts against goods or services delivered

8. Interest: Terms regarding any interest payable on prepaid amounts, if applicable

9. Term and Termination: Duration of the agreement and circumstances under which it can be terminated

10. Refund Rights: Conditions under which prepaid amounts may be refunded

11. Representations and Warranties: Basic statements of fact and promises made by each party

12. Governing Law and Jurisdiction: Confirmation of Danish law as governing law and jurisdiction for disputes

13. Signatures: Execution block for the parties to sign the agreement