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Supplier Credit Agreement

Supplier Credit Agreement Template for South Africa

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Key Requirements PROMPT example:

Supplier Credit Agreement

"I need a Supplier Credit Agreement for my manufacturing company that will extend credit of up to R5 million to bulk purchasers of industrial equipment, with quarterly payment terms and the option to include group companies as additional purchasers."

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Document background
The Supplier Credit Agreement is a crucial commercial document used in South African business transactions where suppliers extend credit facilities to purchasers for goods or services. This agreement type is particularly relevant when establishing ongoing trade relationships requiring regular credit extensions. The document must comply with the National Credit Act 34 of 2005 and other relevant South African legislation, including consumer protection laws and financial regulations. It typically includes detailed terms about credit limits, interest rates, payment schedules, security arrangements, and default provisions. The agreement is essential for businesses seeking to formalize credit arrangements with their suppliers while ensuring legal compliance and protecting both parties' interests. It's particularly important in contexts where regular supply arrangements need to be coupled with credit facilities, helping businesses manage cash flow while maintaining strong supplier relationships.
Suggested Sections

1. Parties: Identification and details of the supplier (credit provider) and purchaser (credit receiver)

2. Background: Context of the agreement, relationship between parties, and purpose of the credit arrangement

3. Definitions and Interpretation: Definitions of key terms and interpretation rules, including National Credit Act definitions where applicable

4. Credit Facility Terms: Core terms of the credit facility including credit limit, interest rate, and repayment terms

5. Supply Arrangements: Terms governing the supply of goods or services under credit

6. Payment Terms: Detailed payment obligations, methods, and timing

7. Interest and Charges: Specification of interest rates, calculation methods, and additional charges

8. Security and Collateral: Details of any security or collateral required for the credit facility

9. Representations and Warranties: Standard representations and warranties from both parties

10. Obligations of the Parties: Specific obligations of both supplier and purchaser

11. Default and Remedies: Events of default and corresponding remedies

12. Termination: Conditions and process for termination of the agreement

13. General Terms: Standard legal provisions including notices, governing law, etc.

Optional Sections

1. Credit Insurance: Terms related to credit insurance if required or offered

2. Electronic Communications: Section dealing with electronic ordering and communications if relevant

3. B-BBEE Compliance: Section addressing B-BBEE requirements if applicable

4. Group Companies: Section extending credit facility to group companies if applicable

5. Foreign Exchange Provisions: For international suppliers or foreign currency transactions

6. Debt Counselling: Information about debt counselling services as required by NCA for certain types of credit agreements

Suggested Schedules

1. Schedule 1: Credit Limit and Pricing: Detailed breakdown of credit limits, pricing, and interest calculations

2. Schedule 2: Product/Service Specifications: Details of products or services covered under the credit facility

3. Schedule 3: Payment Schedule: Detailed repayment schedule and terms

4. Schedule 4: Security Details: Specific details of security or collateral provided

5. Schedule 5: Authorized Representatives: List of authorized representatives who can place orders or make changes

6. Appendix A: Standard Terms and Conditions: Standard trading terms and conditions

7. Appendix B: Compliance Certificates: Required regulatory compliance certificates

8. Appendix C: Form of Draw Down Notice: Template for requesting credit under the facility

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

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Agreement
Applicable Laws
Business Day
Credit Facility
Credit Limit
Commencement Date
Default Event
Default Interest
Delivery
Effective Date
Encumbrance
Finance Charges
Financial Indebtedness
Force Majeure Event
Goods
Governing Law
Group Company
Guarantee
Interest Rate
Material Adverse Effect
National Credit Act
Order
Payment Date
Payment Terms
Principal Debt
Purchase Price
Purchaser
Quotation
Repayment Schedule
Security
Security Documents
Services
Signature Date
Supplier
Supply Terms
Tax
Term
Territory
Transaction Documents
VAT
Clauses
Credit Facility
Payment Terms
Interest and Charges
Security
Supply Terms
Delivery
Risk and Title
Representations and Warranties
Conditions Precedent
Covenants
Default
Force Majeure
Termination
Confidentiality
Data Protection
Anti-corruption
Assignment
Dispute Resolution
Governing Law
Jurisdiction
Notices
Amendment
Entire Agreement
Severability
Waiver
Further Assurance
Costs
Credit Insurance
B-BBEE Compliance
Consumer Protection
Electronic Communications
Financial Reporting
Set-off
Tax
Insurance
Indemnification
Relevant Industries

Manufacturing

Retail

Wholesale

Construction

Mining

Agriculture

Technology

Telecommunications

Automotive

Industrial Supply

Healthcare

Professional Services

Energy

Logistics

Food and Beverage

Relevant Teams

Legal

Finance

Procurement

Treasury

Risk Management

Commercial

Supply Chain

Credit Control

Accounts Payable

Operations

Compliance

Relevant Roles

Chief Financial Officer

Financial Director

Credit Manager

Procurement Manager

Legal Counsel

Commercial Director

Supply Chain Manager

Finance Manager

Accounts Payable Manager

Risk Manager

Treasury Manager

Contracts Manager

Business Development Manager

Operations Director

Credit Controller

Industries
National Credit Act 34 of 2005: Primary legislation governing credit agreements in South Africa, including supplier credit arrangements. Sets out requirements for credit agreements, consumer rights, and credit provider obligations.
Consumer Protection Act 68 of 2008: Protects consumers in supplier relationships, including fair terms, plain language requirements, and quality guarantees.
Companies Act 71 of 2008: Governs business entities in South Africa, relevant for understanding the legal status and capabilities of the contracting parties.
Financial Advisory and Intermediary Services Act 37 of 2002: Regulates financial service providers and may be relevant if the credit agreement involves financial advisory services.
Broad-Based Black Economic Empowerment Act 53 of 2003: Important for supplier relationships in South Africa, affecting supplier selection and compliance requirements.
Electronic Communications and Transactions Act 25 of 2002: Governs electronic communications and transactions, relevant if the agreement will be executed or managed electronically.
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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