Credit Terms Agreement for United Arab Emirates

Credit Terms Agreement Template for United Arab Emirates

A comprehensive credit terms agreement template designed for use in the United Arab Emirates, compliant with UAE Federal Laws and Central Bank regulations. This document establishes the terms and conditions for credit facilities between financial institutions and borrowers, incorporating UAE-specific legal requirements, including Islamic finance principles where applicable. The agreement covers essential elements such as credit limits, payment terms, security requirements, default provisions, and enforcement mechanisms, all structured to align with UAE commercial and banking regulations while providing flexibility for various types of credit arrangements.

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What is a Credit Terms Agreement?

The Credit Terms Agreement Template is designed for use in the United Arab Emirates financial sector, providing a standardized framework for establishing credit facilities between financial institutions and borrowers. This template is crafted to comply with UAE Federal Laws, including the Commercial Transactions Law (Federal Law No. 18 of 1993) and UAE Central Bank regulations. It is particularly useful when establishing new credit relationships or reviewing existing credit arrangements, incorporating both conventional and Islamic finance principles where needed. The document addresses key areas such as credit limits, payment terms, security requirements, and enforcement mechanisms, while maintaining flexibility to accommodate various business needs and regulatory requirements. It serves as a foundational document for managing credit relationships in the UAE market, ensuring legal compliance while protecting the interests of all parties involved.

What sections should be included in a Credit Terms Agreement?

1. Parties: Identification of the credit provider and the customer/borrower

2. Background: Context of the agreement and relationship between parties

3. Definitions and Interpretation: Key terms used throughout the agreement and rules of interpretation

4. Credit Facility Terms: Core terms including credit limit, interest rates, and payment terms

5. Payment Terms: Details of payment obligations, methods, and schedules

6. Security and Collateral: Requirements for security or collateral to secure the credit facility

7. Representations and Warranties: Statements of fact and assurances from the customer

8. Covenants: Ongoing obligations and restrictions on the customer

9. Events of Default: Circumstances constituting default and consequences

10. Enforcement Rights: Credit provider's rights and remedies upon default

11. Term and Termination: Duration of agreement and termination provisions

12. Notices: Communication requirements and contact details

13. Governing Law and Jurisdiction: UAE law application and dispute resolution procedures

What sections are optional to include in a Credit Terms Agreement?

1. Islamic Finance Compliance: Required when the credit facility needs to comply with Sharia principles

2. Personal Guarantee: Used when personal guarantees are required from company owners or directors

3. Insurance Requirements: Detailed when specific insurance coverage is required for the credit facility

4. Cross-Default Provisions: Including when the customer has multiple facilities or agreements

5. Foreign Currency Provisions: Required when credit facility involves multiple currencies

6. Trade Finance Specific Terms: For credit facilities related to trade finance operations

7. Syndication Provisions: When the credit facility involves multiple lenders

What schedules should be included in a Credit Terms Agreement?

1. Schedule 1 - Facility Details: Specific details of credit limits, interest rates, and facility types

2. Schedule 2 - Fee Schedule: Detailed breakdown of all applicable fees and charges

3. Schedule 3 - Security Details: List and description of all security/collateral provided

4. Schedule 4 - Condition Precedents: List of documents and conditions required before facility activation

5. Schedule 5 - Reporting Requirements: Details of required financial and operational reports

6. Appendix A - Payment Schedule: Detailed payment dates and amounts if applicable

7. Appendix B - Compliance Certificate: Template for periodic compliance certification

8. Appendix C - Draw Down Notice: Template for requesting draws on the credit 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

Publisher

Genie AI

Document Type

Loan Agreement

Cost

Free to use
Relevant legal definitions
Relevant Industries

Banking & Financial Services

Manufacturing

Retail

Construction

Trading

Technology

Healthcare

Logistics

Real Estate

Hospitality

Energy

Professional Services

E-commerce

Agriculture

Education

Relevant Teams

Legal

Finance

Risk Management

Compliance

Credit

Treasury

Operations

Commercial

Islamic Banking

Corporate Banking

Business Development

Relevant Roles

Chief Financial Officer

Finance Director

Credit Manager

Legal Counsel

Compliance Officer

Risk Manager

Treasury Manager

Financial Controller

Commercial Director

Business Development Manager

Account Manager

Credit Analyst

Corporate Banking Manager

Islamic Banking Specialist

Relationship Manager

Operations Manager

Industries
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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