Document background
The Prepayment Agreement is essential in commercial transactions where one party needs to make advance payments to another, typically for future goods, services, or other obligations. This document is particularly relevant under Hong Kong law, where significant international trade and commercial transactions often require structured prepayment arrangements. The agreement provides legal certainty by clearly defining the terms of the prepayment, including amount, timing, use restrictions, and application method. It incorporates necessary safeguards and compliance measures aligned with Hong Kong financial regulations and commercial practice. The document is commonly used in manufacturing contracts, large-scale service agreements, and international trade transactions where advance funding is required to secure performance or manage cash flow requirements.
