Payment Agreement Template

Jerry was new in town and was looking for a house to stay as a paying guest. After searching a lot, he finally found a house owned by Mr. Tom. Jerry asked if he could stay at his place. Tom looked at his innocent face and allowed him to stay but he also asked Jerry to pay a certain monthly amount to him. Jerry agreed and they started living happily in the same house. After a month had passed, Mr. Tom asked Jerry for a monthly payment which he plainly refused to pay as he had cunningly avoided to sign the payment agreement papers by which he would have been obligated to pay a certain amount to Mr. Tom. Well, and Mr. Tom had to deal with this nasty nonpaying guest for the rest of his life.

Well, this was a funny Tom and Jerry story but very much inspired by the real life incidents. Many a time it happens that someone owes money to us but we do not have legal document that would compel the borrower to pay us the money at every specific time interval, be it every month, every six months, or every year depending on the nature of the transaction the obligee and obligor shares. But there is one legal document, known as payment agreement, that allows the obligee to receive regular payment from the borrower.

What is Payment Agreement?

Payment agreement is a document signed by the obligee and a payee which states that the obligee has to receive a certain amount from a payee to avoid a specific enforcement action. There are many situations where people have to sign payment agreements. For example, in divorce cases, a mother can get the payment agreement signed from the father stating that he has to pay a certain amount for the child till he attains a certain age. Some insurance companies too get a payment agreement signed by the policy holders stating that they would pay any amounts that are not paid by the insurance company. Hence, the payment agreement is a legal document that binds the payee to make regular payments to the obligee.

Template for Payment Agreement Contract

Looking at the diverse nature of payment agreement, it is evident that its structure is subject to change depending on the kind of contract. For example, the agreement template of an insurance company would be different from the personal loan payment for the alimony after divorce. But there are some basic contents that every payment agreement has to possess. They are as following:

• Name of the obligee and payee
• The total amount that the payee has to pay the obligee
• Date of the agreement
• Date of the commencement of the payment
• The duration or dates of payments
• The ways in which the payment will be made
• Details of collaterals and related clauses
• Any other peculiar rules or clause related to the contract or agreement

Given below is a generic format of the payment agreement that you can refer to draft your won payment agreement.

Payment Agreement Template This payment agreement plan is made between the (Name and address of the obligee) and (Name and address of the payee) wherein the (payee) agrees to make payments to the (obligee) in accordance with the terms provided below: $(Amount) to be received by the (Name and address of the obligee) on or before the first of every month from (Date of commencement of the payment) until the outstanding balance is paid in full which is as of now $(Outstanding balance). Mention all the clauses and exceptions here in a list format. Declaration: I have read the payment agreement and agree with all the terms. I have received a copy of the necessary documents and well aware of the consequences of not meeting with the aforementioned accordance. Name and address of the payee:_____________________ Signature of the payee:____________________________ Date:___________________________________________ Name and address of the obligee:_____________________ Signature of the obligee:____________________________ Date:___________________________________________ Name and address of the witness/es:_____________________ Signature of the witness/es:____________________________ Date:___________________________________________

This was the general format or template for payment agreement which may differ as per each contract and agreement. I hope this information on payment agreement was resourceful for you. So go ahead and draft your own payment agreement as per your requirements. And make sure to use it as when necessary, to avoid any legal issues in future.