Accounts Receivable Agreement Template for Philippines

The Accounts Receivable Agreement serves as a crucial financial instrument in the Philippine business environment, enabling companies to optimize their working capital management through the monetization of their receivables. This document is typically used when a business wishes to sell or assign its accounts receivable to a financial institution or factoring company, either for immediate funding or as part of a broader financing arrangement. The agreement must comply with Philippine financial regulations and commercial laws, including the Civil Code, Securities Regulation Code, and relevant banking regulations. It encompasses detailed provisions for the transfer of receivables, credit risk allocation, collection procedures, and reporting requirements, while incorporating necessary safeguards to protect all parties' interests. The document is particularly valuable for businesses seeking to improve cash flow, reduce credit risk, or access alternative financing sources within the Philippine jurisdiction.

1. Parties: Identifies and provides full legal details of the parties entering into the agreement

2. Background: Sets out the context and purpose of the agreement, including the nature of the receivables and the business relationship

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes rules of interpretation

4. Sale and Purchase/Assignment of Receivables: Details the transfer or assignment of the receivables, including the scope and effective date

5. Purchase Price and Payment Terms: Specifies the consideration for the receivables, payment mechanics, and any adjustments

6. Eligibility Criteria: Establishes the criteria that receivables must meet to be included in the agreement

7. Representations and Warranties: Sets out the assurances given by each party regarding their capacity and the receivables

8. Covenants: Details ongoing obligations of the parties throughout the agreement term

9. Collection and Servicing: Specifies procedures for collecting receivables and managing customer relationships

10. Reporting Requirements: Outlines the reports and information to be provided regarding the receivables

11. Events of Default: Lists circumstances constituting default and their consequences

12. Remedies: Specifies available remedies in case of breach or default

13. Term and Termination: States the duration of the agreement and conditions for termination

14. Confidentiality: Protects confidential information exchanged under the agreement

15. Governing Law and Jurisdiction: Specifies Philippine law as governing law and sets jurisdiction for disputes

16. General Provisions: Includes standard boilerplate clauses such as notices, amendments, and severability