Interim Payment Agreement for Germany

Interim Payment Agreement Template for Germany

This document is a legally binding agreement governed by German law that establishes temporary payment arrangements between parties during specific circumstances or project phases. It complies with the German Civil Code (BGB) and Commercial Code (HGB), incorporating provisions for payment terms, interest rates, and default scenarios in accordance with German commercial law and EU payment regulations. The agreement provides a structured framework for interim payments, including specific payment schedules, conditions, and obligations of all parties involved, while ensuring compliance with German statutory requirements regarding payment terms and commercial transactions.

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What is a Interim Payment Agreement?

The Interim Payment Agreement is essential in commercial relationships where temporary or phased payment arrangements are required outside of or alongside main contractual obligations. This document type is commonly used in scenarios such as large-scale projects, construction works, or ongoing service delivery where regular interim payments are necessary before final completion or during specific project phases. The agreement, governed by German law, provides certainty regarding payment timing, amounts, and conditions while ensuring compliance with German Civil Code (BGB) and Commercial Code (HGB) requirements. It typically includes detailed payment schedules, interest provisions, and specific conditions that must be met for payments to be made. The Interim Payment Agreement is particularly valuable when parties need to establish clear payment mechanisms during transitional periods or when the main contract's payment terms need temporary modification.

What sections should be included in a Interim Payment Agreement?

1. Parties: Identification and details of the contracting parties

2. Background: Context of the interim payment arrangement, including reference to any main agreement or circumstances necessitating this arrangement

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

4. Payment Terms: Detailed interim payment obligations, including amounts, frequency, and payment methods

5. Duration: Term of the interim payment arrangement and conditions for its continuation or termination

6. Interest and Late Payments: Interest rates applicable to late payments in accordance with German law

7. Obligations of the Parties: Specific duties and responsibilities of each party under the arrangement

8. Representations and Warranties: Basic warranties regarding capacity to enter into the agreement and validity of payment obligations

9. Termination: Circumstances under which the interim payment arrangement can be terminated

10. Governing Law and Jurisdiction: Confirmation of German law as governing law and jurisdiction for disputes

11. Miscellaneous: Standard boilerplate provisions including severability, entire agreement, and amendments

What sections are optional to include in a Interim Payment Agreement?

1. Security: Required when additional security or guarantees are provided for the interim payments

2. Set-off Rights: Include when parties need to address rights to set off payments against other obligations

3. Third Party Rights: Necessary when third parties have rights or obligations under the arrangement

4. Parent Company Guarantee: Include when a parent company guarantee is required to secure the payment obligations

5. Conditions Precedent: Include when interim payments are subject to specific conditions being met

6. VAT and Taxation: Detailed tax provisions when significant tax implications exist

7. Currency and Exchange Rates: Required for cross-border payments or when multiple currencies are involved

What schedules should be included in a Interim Payment Agreement?

1. Payment Schedule: Detailed schedule of payment amounts, dates, and milestones

2. Bank Account Details: Banking information for making payments

3. Form of Payment Notice: Template for payment notices or invoicing requirements

4. Supporting Documentation: List of required documentation to support payment claims

5. Calculation of Interest: Methodology for calculating applicable interest rates

6. Related Agreements: References to main agreement or other relevant contracts

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

Jurisdiction

Germany

Publisher

Genie AI

Document Type

Payment Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Construction

Manufacturing

Engineering

Professional Services

Information Technology

Infrastructure

Energy

Real Estate Development

Project Development

Consulting Services

Industrial Services

Telecommunications

Relevant Teams

Legal

Finance

Commercial

Procurement

Treasury

Project Management

Operations

Risk Management

Accounts Payable

Contract Administration

Relevant Roles

Chief Financial Officer

Finance Director

Commercial Director

Project Manager

Contract Manager

Legal Counsel

Treasury Manager

Accounts Payable Manager

Procurement Manager

Financial Controller

Business Development Manager

Operations Director

Risk Manager

Commercial 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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