Payment Takeover Contract for United Arab Emirates

Payment Takeover Contract Template for United Arab Emirates

A Payment Takeover Contract under UAE law is a legally binding agreement where one party (the Transferee) assumes the payment obligations of another party (the Transferor) towards a Creditor. The document is governed by UAE Federal Laws, particularly the UAE Civil Code and Commercial Transactions Law, and must comply with UAE Central Bank regulations when involving regulated financial institutions. It details the terms of payment transfer, including amounts, schedules, conditions precedent, and the mechanisms for executing the transfer, while incorporating necessary provisions for UAE regulatory compliance and Islamic finance principles where applicable.

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What is a Payment Takeover Contract?

The Payment Takeover Contract is utilized in the United Arab Emirates when there is a need to transfer payment obligations from one entity to another, commonly occurring in business restructuring, debt refinancing, or corporate acquisition scenarios. This document, governed by UAE law, establishes the legal framework for the assumption of payment obligations, ensuring compliance with UAE Civil Code, Commercial Transactions Law, and where applicable, Islamic finance principles. The contract typically includes detailed payment terms, conditions precedent, representations and warranties, and specific provisions required by UAE banking regulations. It's particularly crucial in commercial transactions where debt obligations need to be transferred while maintaining the creditor's rights and ensuring regulatory compliance in the UAE jurisdiction.

What sections should be included in a Payment Takeover Contract?

1. Parties: Identification of all parties involved: the Original Debtor (Transferor), the New Debtor (Transferee), and the Creditor

2. Background: Context of the original payment obligation and the reason for the takeover

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

4. Transfer of Payment Obligations: Core provisions detailing the specific payment obligations being transferred and the effective date

5. Payment Terms: Detailed terms of payment including amount, currency, payment schedule, and payment methods

6. Representations and Warranties: Statements of fact and assurances from all parties regarding their capacity and authority to enter into the agreement

7. Conditions Precedent: Conditions that must be satisfied before the payment takeover becomes effective

8. Covenants: Ongoing obligations of the parties, including notification requirements and maintenance of records

9. Default and Remedies: Events constituting default and the corresponding remedies available to the parties

10. Governing Law and Jurisdiction: Specification of UAE law as governing law and jurisdiction for dispute resolution

What sections are optional to include in a Payment Takeover Contract?

1. Islamic Finance Compliance: Required when the payment obligations need to comply with Sharia principles

2. Security Arrangements: Include when additional security or guarantees are provided for the payment obligations

3. Step-In Rights: Required when the creditor needs rights to step in and take control under specific circumstances

4. Tax Provisions: Include when there are specific tax implications that need to be addressed

5. Currency Exchange Provisions: Required when payments involve multiple currencies

6. Force Majeure: Include when parties want specific provisions for handling unforeseen circumstances affecting payment obligations

What schedules should be included in a Payment Takeover Contract?

1. Schedule 1 - Payment Schedule: Detailed breakdown of payment amounts, dates, and methods

2. Schedule 2 - Original Payment Agreement: Copy or summary of the original agreement creating the payment obligations

3. Schedule 3 - Required Notices: Forms of notices required under the agreement

4. Schedule 4 - Security Details: Details of any security or guarantees provided

5. Appendix A - Contact Details: Contact information for all parties and authorized representatives

6. Appendix B - Compliance Documents: Required regulatory and compliance documents including any necessary Central Bank approvals

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

Corporate Finance

Real Estate

Construction

Manufacturing

Retail

Healthcare

Energy

Infrastructure

Telecommunications

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Secretariat

Credit Control

Operations

Business Development

Accounts

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Financial Controller

Legal Counsel

Corporate Lawyer

Compliance Officer

Risk Manager

Credit Manager

Account Manager

Business Development Director

Restructuring Officer

Company Secretary

Banking Relationship 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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