Instalment Purchase Agreement Template for United Arab Emirates

This document is a comprehensive Installment Purchase Agreement governed by UAE law, designed to facilitate the sale and purchase of goods through structured payment installments. It complies with UAE Federal Laws, including the Civil Code and Commercial Code, and incorporates consumer protection requirements where applicable. The agreement details the terms of sale, payment schedule, title transfer conditions, and parties' rights and obligations, while ensuring compliance with UAE Central Bank regulations regarding installment financing. It includes provisions for security interests, default remedies, and warranty terms specific to the UAE legal framework.

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What is a Instalment Purchase Agreement?

The Installment Purchase Agreement is essential for transactions in the UAE where goods are sold with payment spread over time through regular installments. This document type is commonly used in both business-to-business and business-to-consumer contexts, particularly for high-value items such as equipment, vehicles, or industrial machinery. The agreement must comply with UAE Federal Law No. 5 of 1985 (Civil Code) and other relevant regulations, including Central Bank guidelines on installment financing. It is structured to protect both seller and purchaser interests while ensuring enforceability under UAE law. The document includes detailed payment terms, title transfer conditions, security arrangements, and default provisions, making it suitable for complex commercial transactions while remaining adaptable for simpler consumer purchases.

What sections should be included in a Instalment Purchase Agreement?

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

2. Background: Context of the transaction and brief description of the arrangement

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

4. Sale and Purchase: Details of the goods being sold and purchased, including specifications and condition

5. Purchase Price: Total purchase price, down payment, and installment structure

6. Payment Terms: Detailed payment schedule, installment amounts, due dates, and payment methods

7. Delivery and Acceptance: Terms for delivery of goods and acceptance procedures

8. Title and Risk: When title passes to the purchaser and risk allocation

9. Seller's Warranties: Warranties regarding the goods and seller's authority to sell

10. Purchaser's Obligations: Key obligations including maintenance, insurance, and use restrictions

11. Default and Remedies: Events of default and available remedies for both parties

12. Termination: Circumstances and procedures for termination of the agreement

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

14. Notices: How formal notices between parties should be given

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

What sections are optional to include in a Instalment Purchase Agreement?

1. Security Interest: Details of any security interest retained in the goods - used when additional security is required

2. Insurance Requirements: Detailed insurance obligations - used for high-value items or where specific risks need coverage

3. Early Payment Options: Terms for early payment or full settlement - used when early payment discounts are offered

4. Maintenance and Servicing: Maintenance requirements - used for complex equipment or machinery

5. Third-Party Rights: Rights of financing parties or guarantors - used when external financing is involved

6. Export/Import Requirements: Compliance with trade regulations - used for international transactions

7. Installation and Training: Terms for setup and training - used for technical equipment or systems

What schedules should be included in a Instalment Purchase Agreement?

1. Schedule 1 - Description of Goods: Detailed specifications, serial numbers, and condition of goods

2. Schedule 2 - Payment Schedule: Detailed breakdown of installment amounts and due dates

3. Schedule 3 - Delivery Details: Specific delivery instructions, location, and timing

4. Schedule 4 - Warranty Terms: Detailed warranty terms and conditions

5. Appendix A - Required Insurance Coverage: Specific insurance requirements and minimum coverage

6. Appendix B - Maintenance Schedule: Required maintenance and servicing schedule

7. Appendix C - Form of Payment Notice: Template for payment notices and reminders

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

Publisher

Genie AI

Document Type

Payment Agreement

Sector

Banking

Cost

Free to use

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