Deferment Agreement for United Arab Emirates

Deferment Agreement Template for United Arab Emirates

A comprehensive legal document governed by UAE law that formalizes the arrangement between parties to postpone or restructure payment obligations or other contractual commitments. The agreement details the original obligation, new payment schedule, and terms of deferment while ensuring compliance with UAE civil and commercial laws, including consideration of Islamic finance principles where applicable. It includes specific provisions for default, security arrangements, and enforcement mechanisms in accordance with UAE jurisdiction requirements, making it suitable for both conventional and Islamic finance structures.

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What is a Deferment Agreement?

The Deferment Agreement is a crucial legal instrument in the UAE business environment, particularly relevant in times of economic adjustment or when parties need to restructure payment obligations. This document type is commonly used across various sectors in the UAE, from real estate to commercial trading, and must comply with both UAE Civil Code requirements and, where applicable, Islamic finance principles. The agreement typically includes detailed payment rescheduling terms, any additional security arrangements, and specific conditions that must be met throughout the deferment period. It's essential to note that while the Deferment Agreement provides flexibility in payment terms, it must still adhere to UAE Central Bank guidelines and local commercial practices. The document serves as a formal modification of existing obligations while preserving the fundamental rights of all parties involved.

What sections should be included in a Deferment Agreement?

1. Parties: Identification of all parties to the agreement, including the creditor and debtor

2. Background: Details of the original obligation/debt and the circumstances leading to the deferment request

3. Definitions: Key terms used throughout the agreement, including 'Original Agreement', 'Deferred Amount', 'Deferment Period'

4. Acknowledgment of Original Obligation: Clear statement of the original debt/obligation amount and its validity

5. Deferment Terms: Specific details of the deferment including new payment dates and amounts

6. Payment Schedule: Detailed breakdown of the new payment schedule and methodology

7. Representations and Warranties: Statements from both parties regarding their capacity and authority to enter into the agreement

8. Conditions Precedent: Any conditions that must be met before the deferment becomes effective

9. Default Provisions: Consequences of failing to meet the new payment schedule

10. Governing Law and Jurisdiction: Confirmation of UAE law application and jurisdiction for disputes

What sections are optional to include in a Deferment Agreement?

1. Security Provisions: Used when additional security is being provided for the deferred amount

2. Guarantee: Include when a third-party guarantor is providing support for the deferred payments

3. Islamic Finance Compliance: Specific section required when the agreement needs to explicitly comply with Sharia principles

4. Tax Provisions: Include when the deferment has tax implications that need to be addressed

5. Force Majeure: Optional section dealing with circumstances that might affect the new payment schedule

6. Assignment: Include if either party needs the right to assign their rights under the agreement

What schedules should be included in a Deferment Agreement?

1. Schedule 1 - Original Agreement Details: Copy or summary of the original agreement being deferred

2. Schedule 2 - New Payment Schedule: Detailed breakdown of all payment dates and amounts under the deferment

3. Schedule 3 - Calculation Methodology: If applicable, explanation of how deferred amounts and any permitted charges are calculated

4. Appendix A - Form of Payment Notice: Standard form for payment notifications under the new schedule

5. Appendix B - Security Documents: If applicable, copies of any new security documents

6. Appendix C - Compliance Certificates: Templates for any ongoing compliance certifications required

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

Payment Agreement

Sector

Banking

Cost

Free to use
Relevant Industries

Banking & Financial Services

Real Estate & Construction

Manufacturing & Industrial

Trading & Commercial

Retail

Healthcare

Education

Hospitality & Tourism

Technology & Telecommunications

Energy & Utilities

Professional Services

Islamic Finance

Relevant Teams

Legal

Finance

Treasury

Credit Control

Compliance

Risk Management

Commercial Operations

Islamic Banking

Corporate Banking

Collections

Accounts Receivable

Contracts Administration

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Credit Controller

Legal Counsel

Compliance Officer

Risk Manager

Commercial Director

Contracts Manager

Collections Manager

Islamic Finance Specialist

Restructuring Officer

Account Manager

Corporate Banking Manager

Financial Controller

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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