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Trade Credit Agreement Template

Why do I need terms and conditions when I offer trade credits? If you offer credit contracts for the payment of goods or services, make sure you have a series of properly written terms and conditions. It is important that these Ts-Cs are clearly defined at the beginning of an agreement, so that both parties are fully aware of their rights and obligations. Getting it from the start can smooth out the process, avoid future disagreements and help resolve disputes. It is much better to anticipate potential contentious issues – and reach agreement on how to deal with them when they occur – than to suddenly face a difficult situation and decide how to resolve them in the heat of the moment. Terms and conditions should define issues relating to the use of the credit facility by customers for issues such as billing and payment. They should also consider the assessment of the eligibility of a credit account, the terms of setting credit limits, possible audits and, if necessary, take into account the suspension or cancellation of the credit facility. The more reasonably the terms can be decided in advance, the less likely there is a misunderstanding during the business relationship. If you have not offered credit facilities in the past, a properly worded presentation document containing the terms and conditions for credit accounts can be very helpful. These Ts-Cs can be used in combination with conditions for the sale of goods and services to provide additional protection. If a customer does not pay on time or otherwise comply with the terms of a commercial credit contract before taking formal legal action, you can first send them a letter warning of the infringement. This essentially serves as a gentle reminder of breaches of credit conditions and requires recognition of the outstanding balance.

It ensures that communication channels remain open and that any problems that could lead to litigation can be resolved at an early stage and avoid a snowball effect and potential legal costs. ..



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