The Third Party Payment Contract is essential in complex financial transactions where payment obligations are fulfilled by a party other than the original debtor. This document is commonly used in Indian business transactions involving project financing, corporate restructuring, or ongoing commercial arrangements where payment delegation is required. It ensures compliance with Indian financial regulations, including the Payment and Settlement Systems Act, 2007, and the Indian Contract Act, 1872. The agreement is particularly relevant when businesses need to structure payment arrangements through intermediaries, requiring clear documentation of payment terms, obligations, and liabilities. It includes comprehensive provisions for payment scheduling, default scenarios, and regulatory compliance, making it suitable for both domestic and cross-border transactions subject to Indian law.

1. Parties: Identifies and defines all three parties: the Principal Debtor/Payer, the Beneficiary/Payee, and the Third-Party Payor

2. Background: Explains the context of the agreement, including the underlying obligation between the principal debtor and beneficiary, and the third party's role

3. Definitions: Defines key terms used throughout the agreement, including payment terms, relevant dates, and specific financial terminology

4. Payment Terms: Details the amount, currency, timing, and method of payments to be made by the third party

5. Conditions Precedent: Specifies conditions that must be met before payment obligations become effective

6. Third Party's Obligations: Outlines the specific duties and responsibilities of the third party in making payments

7. Principal Debtor's Obligations: Defines the original debtor's continuing obligations and responsibilities

8. Beneficiary's Rights and Obligations: Specifies the payee's rights and any corresponding obligations

9. Representations and Warranties: Standard warranties from all parties regarding their capacity and authority to enter into the agreement

10. Events of Default: Lists circumstances constituting default and corresponding consequences

11. Indemnification: Details the indemnification obligations between parties

12. Governing Law and Jurisdiction: Specifies Indian law as governing law and defines jurisdiction for dispute resolution

13. Notices: Specifies how formal communications between parties should be made and delivered

14. Term and Termination: Defines the duration of the agreement and circumstances for termination