Seller Financing Contract for Germany

Seller Financing Contract Template for Germany

A comprehensive legal agreement governed by German law that combines elements of both a sales contract and a financing agreement, where the seller extends credit to the buyer for the purchase of assets or property. The document details the purchase price, payment terms, interest rates, and security arrangements in compliance with German civil law (BGB) and relevant financial regulations. It includes specific provisions for default remedies, collateral requirements, and transfer of ownership, while ensuring compliance with German consumer protection laws when applicable. The agreement typically requires notarization, especially for real estate transactions, and must meet strict German documentation requirements for enforceability.

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What is a Seller Financing Contract?

The Seller Financing Contract (Verkäuferfinanzierungsvertrag) is a specialized agreement used in German business transactions where traditional bank financing is either not preferred or not available. This document type is particularly valuable for business sales, real estate transactions, and equipment purchases where the seller is willing to finance the buyer's purchase. The agreement must comply with German civil law (BGB), banking regulations, and when applicable, consumer protection laws. It combines elements of both sales and credit agreements, requiring careful structuring to ensure enforceability under German law. The document typically includes detailed terms about the asset being sold, financing conditions, security arrangements, and risk mitigation measures. Such contracts are especially common in situations where buyers seek more flexible financing terms or when the asset's specialized nature makes traditional banking finance less suitable.

What sections should be included in a Seller Financing Contract?

1. Parties: Identification of the seller/creditor and buyer/debtor with full legal names and addresses

2. Background: Context of the transaction, including description of the sale object and reasoning for seller financing arrangement

3. Definitions: Key terms used throughout the agreement, including financial terms, property descriptions, and technical terminology

4. Purchase Price and Financing Terms: Total purchase price, down payment, financed amount, interest rate, and payment schedule

5. Payment Terms: Detailed payment obligations, including payment methods, due dates, and late payment consequences

6. Security Interest: Details of any collateral or security interests retained by the seller

7. Representations and Warranties: Statements of fact by both parties regarding their capacity, authority, and the subject of sale

8. Delivery and Transfer of Title: Conditions and process for transferring ownership and possession

9. Default and Remedies: Events of default and corresponding remedies, including acceleration rights

10. Insurance and Maintenance: Requirements for insurance and maintenance of the financed property

11. Governing Law and Jurisdiction: Specification of German law application and jurisdiction for disputes

12. Notices: Process and addresses for formal communications between parties

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

What sections are optional to include in a Seller Financing Contract?

1. Guarantor Provisions: Required when a third-party guarantor is involved in securing the financing

2. Prepayment Terms: Include when early payment options are allowed, specifying any penalties or discounts

3. Property Use Restrictions: Necessary when the seller wishes to impose restrictions on the use of the property during the financing period

4. Assignment and Transfer: Include when either party may need to transfer their rights or obligations

5. Tax Considerations: Required when specific tax arrangements or implications need to be addressed

6. Insurance Requirements: Detailed section needed when specific insurance requirements exceed standard provisions

7. Registration Requirements: Include when the agreement needs to be registered with specific authorities

8. Third-Party Rights: Required when third parties have specific rights or obligations under the agreement

What schedules should be included in a Seller Financing Contract?

1. Schedule A - Property Description: Detailed description of the property or assets being sold and financed

2. Schedule B - Payment Schedule: Amortization table showing all payments, interest, and principal portions

3. Schedule C - Insurance Requirements: Detailed insurance specifications and coverage requirements

4. Schedule D - Required Documents: List of all documents required for closing and ongoing compliance

5. Appendix 1 - Form of Transfer Documents: Templates for property transfer documentation

6. Appendix 2 - Security Documentation: Forms and details of security arrangements

7. Appendix 3 - Calculation Methods: Detailed explanation of interest calculations and payment applications

8. Appendix 4 - Condition Report: Initial condition assessment of the financed property or assets

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

Financing Agreement

Cost

Free to use
Relevant legal definitions
Relevant Industries

Real Estate

Manufacturing

Equipment Sales

Automotive

Industrial Machinery

Small Business

Agriculture

Commercial Property

Retail

Construction

Relevant Teams

Legal

Finance

Sales

Credit and Risk

Commercial

Treasury

Compliance

Real Estate

Business Development

Corporate Development

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Contract Manager

Credit Manager

Sales Director

Business Development Manager

Risk Manager

Commercial Director

Treasury Manager

Real Estate Manager

Asset Manager

Compliance Officer

Financial Controller

Corporate Lawyer

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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