Deferred Sale Agreement for United Arab Emirates

Deferred Sale Agreement Template for United Arab Emirates

A comprehensive legal document governed by UAE law that establishes the terms and conditions for a sale transaction where the payment is deferred over an agreed period. This agreement incorporates UAE Civil Code requirements and Sharia principles, particularly relevant to Bai Al-Muajjal (deferred payment sale) structures. It details the payment schedule, transfer of ownership, security arrangements, and risk allocation between parties, while ensuring compliance with both UAE commercial law and Islamic finance principles.

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What is a Deferred Sale Agreement?

The Deferred Sale Agreement is a crucial document used in UAE commercial transactions where parties wish to structure a sale with delayed payment terms. This arrangement is particularly common in large asset purchases, equipment financing, and commercial property transactions. The document must comply with UAE Civil Code requirements and Sharia principles, making it suitable for both conventional and Islamic finance transactions. It includes comprehensive provisions for payment scheduling, security arrangements, risk transfer, and ownership rights, while addressing specific UAE regulatory requirements and local commercial practices. The agreement's structure ensures it can be effectively enforced under UAE law while maintaining Sharia compliance, particularly important in the UAE jurisdiction where Islamic finance principles are integral to the legal framework.

What sections should be included in a Deferred Sale Agreement?

1. Parties: Identification of seller and purchaser with full legal names and addresses

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

3. Definitions: Definitions of key terms used throughout the agreement

4. Sale and Purchase: Core terms of the sale including description of assets/goods and confirmation of sale

5. Purchase Price and Payment Terms: Detailed breakdown of purchase price and deferred payment structure

6. Delivery and Transfer of Risk: Terms regarding delivery of goods/assets and when risk passes to the purchaser

7. Seller's Warranties: Warranties regarding ownership, condition, and quality of goods/assets

8. Purchaser's Warranties: Warranties regarding financial capacity and commitment to payment schedule

9. Title and Ownership: Provisions regarding transfer of title and ownership rights

10. Security: Security arrangements for the deferred payments

11. Events of Default: Circumstances constituting default and consequences

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

13. Governing Law and Jurisdiction: Specification of UAE law as governing law and jurisdiction details

14. Notices: Process and requirements for formal communications between parties

15. General Provisions: Standard boilerplate clauses including assignment, amendments, and severability

What sections are optional to include in a Deferred Sale Agreement?

1. Sharia Compliance Declaration: Required if the agreement needs explicit Sharia compliance certification

2. Insurance: Required if specific insurance arrangements are needed during the deferred payment period

3. Third Party Rights: Include if there are relevant third party interests or rights

4. Export/Import Requirements: Required for international transactions

5. Maintenance and Support: Include for sales of equipment or technology requiring ongoing support

6. Intellectual Property: Required if the sale involves any IP rights

7. Confidentiality: Include if sensitive commercial information is involved

8. Force Majeure: Optional clause for unforeseeable circumstances affecting performance

What schedules should be included in a Deferred Sale Agreement?

1. Schedule 1 - Description of Goods/Assets: Detailed description of items being sold

2. Schedule 2 - Payment Schedule: Detailed breakdown of payment installments, dates, and amounts

3. Schedule 3 - Delivery Schedule: Timeline and requirements for delivery if complex or multiple deliveries

4. Schedule 4 - Form of Transfer Documentation: Template documents for transferring title

5. Schedule 5 - Security Documentation: Forms of any security documents required

6. Appendix A - Technical Specifications: Technical details of goods/assets if applicable

7. Appendix B - Condition Report: Initial condition report for valuable assets

8. Appendix C - Warranties: Detailed manufacturer or seller warranties if applicable

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

Manufacturing

Real Estate

Automotive

Industrial Equipment

Technology

Construction

Retail

Healthcare

Energy

Agriculture

Transportation

Islamic Finance

Relevant Teams

Legal

Finance

Commercial

Compliance

Treasury

Procurement

Sales

Risk Management

Islamic Banking

Credit

Operations

Business Development

Relevant Roles

Chief Financial Officer

Finance Director

Commercial Director

Legal Counsel

Compliance Officer

Treasury Manager

Procurement Manager

Sales Director

Risk Manager

Islamic Finance Specialist

Contract Manager

Business Development Manager

Credit Manager

Operations Director

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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