Account Purchase Agreement Template for the United States

An Account Purchase Agreement is a comprehensive legal contract that governs the sale and transfer of accounts receivable, customer accounts, or other financial assets from one party to another. In the United States, these agreements are critical for businesses engaging in factoring, debt purchasing, or asset-based financing transactions where companies need immediate cash flow by selling their outstanding receivables.

When do you need this document?

You need an Account Purchase Agreement when your business is selling accounts receivable to improve cash flow rather than waiting for customer payments. This document is essential in factoring arrangements where a factoring company purchases your invoices at a discount for immediate cash. Manufacturing companies often use these agreements when selling aged receivables to collection agencies or debt buyers. Healthcare providers frequently utilize account purchase agreements when transferring patient account portfolios to specialized medical billing companies. Additionally, financial institutions require these agreements when purchasing loan portfolios or credit card debt from other lenders.

Key legal considerations

The purchase price mechanism requires careful structuring to account for collection rates, account age, and debtor creditworthiness. Representations and warranties sections must accurately reflect the quality and collectibility of the accounts being sold, as false representations can lead to significant liability. The agreement should clearly define which party bears the risk of non-collection and establish procedures for handling disputed accounts. Security interests and perfection requirements under UCC Article 9 must be properly addressed to ensure the buyer obtains clear title to the purchased accounts. Data privacy and security provisions are crucial when transferring consumer account information, requiring compliance with federal privacy laws and state data protection regulations.

Legal requirements in United States

Federal UCC Article 9 governs the creation and perfection of security interests in accounts, requiring proper filing of financing statements to protect the buyer's interests. The Fair Credit Reporting Act mandates specific procedures when purchasing consumer debt, including proper notification requirements and dispute handling protocols. Compliance with the Fair Debt Collection Practices Act is essential if the buyer will be collecting on purchased consumer accounts. The Federal Trade Commission Act prohibits unfair or deceptive practices in account purchases and subsequent collection activities. State licensing requirements may apply depending on the type of accounts being purchased and the buyer's collection activities. Truth in Lending Act compliance is necessary when purchasing credit-related accounts to ensure proper disclosure of terms to consumers.