Payment procedure clause: Copy, customize, and use instantly
Introduction
A payment procedure clause outlines the terms and conditions related to how payments will be made, including timing, methods, and any required documentation or processes. It ensures clarity between the parties regarding payment obligations and expectations, helping to avoid disputes over payment terms. This clause typically covers details such as the payment schedule, invoicing procedures, and penalties for late payments, providing both parties with a clear understanding of financial responsibilities.
Below are templates for payment procedure clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Fixed payment procedure clause
This version ensures fixed and predetermined payment terms.
Payments under this Agreement shall be made in the amount of [specified amount] on a [monthly/quarterly/annual] basis, due within [number] days of the invoice date. The invoice will be issued on the first day of each payment period, and payment shall be made by wire transfer to the designated account provided by the Seller. Late payments will incur a [percentage]% penalty for each [time period] overdue.
Milestone payment procedure clause
This version outlines payments based on milestones or project completion.
Payments under this Agreement shall be made according to the following milestones:[Milestone 1]: [Amount or percentage] due upon completion of [specific task].[Milestone 2]: [Amount or percentage] due upon completion of [specific task]. Each milestone shall be invoiced separately, and payment is due within [number] days of receipt of the invoice. Any delay in the completion of milestones may result in delayed payments until the corresponding milestone is completed.
Progress payment procedure clause
This version allows for ongoing payments as work progresses.
Payments for services rendered under this Agreement shall be made on a progress basis, with invoices issued at the end of each [week/month/quarter] reflecting the work completed during that period. Payments are due within [number] days of receipt of each invoice. The Seller must provide sufficient documentation to verify progress before any payment is made.
Payment upon receipt of goods or services clause
This version requires payment only after the goods or services have been delivered.
Payment for goods or services provided under this Agreement shall be due within [number] days from the date the Buyer has received the goods or services, whichever occurs later. The Seller shall issue an invoice upon delivery, and the Buyer is required to pay the invoiced amount within the specified period.
Payment procedure clause with discounts for early payment
This version provides incentives for early payments.
The Buyer shall pay the full invoiced amount within [number] days of the invoice date. If payment is made within [number] days of the invoice date, the Buyer will receive a [percentage]% discount on the total invoice amount. Payments made after [number] days will incur a late fee of [percentage]% per month on the outstanding amount.
Payment procedure clause with late fees
This version includes provisions for late payment penalties.
Payments are due within [number] days of the invoice date. Any overdue payment shall incur a late fee of [percentage]% of the outstanding amount for each [time period] the payment remains unpaid. The late fee shall accrue until full payment is made. The Seller may suspend further deliveries or services if payments are not made within [number] days of the due date.
Payment procedure clause with reimbursement of costs
This version covers reimbursements for additional costs incurred.
In addition to the payments outlined in this Agreement, the Buyer agrees to reimburse the Seller for any reasonable and documented costs incurred during the performance of this Agreement, including [list of reimbursable costs]. Reimbursement requests shall be submitted with supporting documentation and will be paid within [number] days of receipt of the invoice.
Payment procedure clause with payment method options
This version provides flexibility in payment methods.
Payments under this Agreement shall be made by [method of payment, e.g., wire transfer, check, credit card]. The Buyer shall provide payment in [currency] to the Seller’s designated bank account or via another mutually agreed-upon method. Payments must be made in full by the due date specified in the relevant invoice.
Payment procedure clause with currency specifications
This version specifies the currency for payments.
All payments under this Agreement shall be made in [specified currency]. The Seller reserves the right to convert any payments made in other currencies into [specified currency] at the prevailing exchange rate on the date of payment. The Buyer shall bear any exchange rate fluctuation costs.
Payment procedure clause with taxes and duties
This version specifies the responsibility for taxes and duties.
The Buyer is responsible for all taxes, duties, or other governmental charges levied in connection with the payments due under this Agreement, except for taxes based on the Seller's income. The Buyer agrees to pay any such taxes in addition to the amounts owed for the goods and services provided, and shall provide proof of tax payment upon request.
Payment procedure clause with invoicing requirements
This version clarifies invoicing requirements.
The Seller shall issue invoices for each payment due under this Agreement. Each invoice must include [details required, such as invoice number, description of goods/services, payment terms, etc.]. Invoices shall be sent to the Buyer within [number] days after the completion of services or delivery of goods. Payments shall be made within [number] days of receipt of the invoice.
Payment procedure clause with security interest
This version allows the seller to retain a security interest in the goods until paid.
The Buyer agrees that the Seller retains a security interest in the goods provided under this Agreement until full payment has been received. The Buyer agrees to promptly notify the Seller of any event that could affect the goods before full payment is made, including damage, loss, or theft.
Payment procedure clause with prepayment requirement
This version requires prepayment before delivery of goods or services.
The Buyer agrees to make a prepayment of [percentage]% of the total contract value before the Seller proceeds with the delivery of goods or services. The remaining balance is due within [number] days after delivery or completion of services. If prepayment is not made, the Seller reserves the right to suspend or cancel the order.
Payment procedure clause with flexible payment terms
This version allows for payment extensions with mutual agreement.
The Parties agree that payments due under this Agreement may be extended by mutual written consent. If either party requires an extension, they must notify the other party in writing at least [number] days before the due date. Any extended payment terms will be subject to interest at a rate of [percentage]% per [time period] on the outstanding balance.
Payment procedure clause with installment payments
This version provides for installment payments over time.
The Buyer agrees to pay the Seller in [number] equal installments of [specified amount] each, due on the [specific dates]. Payments will be made by wire transfer to the Seller’s designated bank account. If any installment is not paid on time, the full remaining balance shall become due immediately.
Payment procedure clause with payment receipt acknowledgment
This version requires the acknowledgment of payment receipts.
Upon receipt of each payment, the Seller shall provide the Buyer with a written acknowledgment of receipt within [number] days. If the Buyer does not receive an acknowledgment within this period, the Buyer must notify the Seller, and failure to do so will be deemed as acceptance of the payment terms as correct.
Payment procedure clause with payment confirmation clause
This version includes a payment confirmation requirement.
The Buyer must confirm in writing that the payment has been made within [number] days of the due date. If the Buyer fails to confirm payment within the specified period, the Seller may take appropriate actions, including suspension of services or delivery until confirmation is received.
Payment procedure clause with joint bank account payment option
This version offers the use of a joint bank account for payments.
The Parties agree that payments under this Agreement may be made into a jointly held bank account. Both Parties shall have access to the account, and any payments will be made according to the payment schedule outlined in this Agreement. All payments shall require the approval of both Parties before being released.
Payment procedure clause with dispute resolution for payment issues
This version addresses disputes over payments.
In the event of a dispute over any payment, the Parties agree to resolve the issue through mediation within [number] days of the dispute being raised. The Parties shall continue to adhere to the agreed payment schedule unless otherwise instructed by the mediator.
Payment procedure clause with payment in arrears
This version specifies that payments will be made in arrears.
The Buyer agrees to make payments in arrears, with invoices issued at the end of each month for the goods or services provided during that month. Payments are due within [number] days of the invoice date. Failure to make timely payment may result in the suspension of further deliveries.
Payment procedure clause with automatic renewal
This version includes automatic payment renewals.
The Parties agree that the payment terms of this Agreement will automatically renew for successive [year/quarter] periods unless either Party provides written notice of termination at least [number] days before the end of the current period. Payments for each renewal period will be made in accordance with the original payment terms.
Payment procedure clause with payment method restrictions
This version restricts the payment method.
Payments under this Agreement shall be made exclusively by [specified payment method], and the Buyer shall not change the payment method without the Seller’s written consent. Any attempt to pay using an alternative method will be rejected, and the Buyer must pay any associated fees for the transaction.
Payment procedure clause with performance-based payment
This version ties payments to the successful completion of specific performance metrics.
Payments under this Agreement will be made upon the satisfactory completion of the following performance benchmarks:[Benchmark 1]: [Amount or percentage] due upon completion of [task].[Benchmark 2]: [Amount or percentage] due upon achievement of [milestone]. The Seller will provide written notice upon completion of each benchmark, and payments are due within [number] days of receiving the notice.
Payment procedure clause with prorated payment
This version includes prorated payment terms.
If the Agreement is terminated before the end of a payment period, the Buyer shall pay the Seller a prorated amount based on the portion of the services or goods delivered up until the termination date. The prorated amount will be calculated by multiplying the total payment amount by the fraction of time or units delivered.
Payment procedure clause with payment review rights
This version gives the Buyer the right to review payment terms before making payment.
The Buyer shall have the right to review all invoices for accuracy before making payment. Payment is due within [number] days after the Buyer’s approval of the invoice. If the Buyer disputes any charges, they must notify the Seller within [number] days, and payment will be suspended until the dispute is resolved.
Payment procedure clause with specific invoicing instructions
This version provides specific instructions for invoicing.
The Seller shall issue invoices to the Buyer in accordance with the following instructions:Each invoice must include a detailed description of the goods/services provided, the applicable pricing, and the payment terms.Invoices must be submitted via [method, e.g., email, mail] to [specified contact]. Payments shall be due within [number] days of receipt of an accurate invoice.
Payment procedure clause with early payment discount
This version offers a discount for early payment.
The Buyer is eligible for a [percentage]% discount on the total invoice amount if payment is made within [number] days from the invoice date. If the payment is not made within this period, the full amount will be due, and no discount will apply.
Payment procedure clause with payment escalation
This version includes a payment escalation plan.
If any payment under this Agreement is not received within [number] days of the due date, the outstanding amount will incur a [percentage]% escalation for each [time period] overdue. This escalation will continue until payment is made in full.
Payment procedure clause with payment guarantee
This version includes a third-party payment guarantee.
The Buyer agrees to provide a payment guarantee from a third-party financial institution if the payment terms exceed [amount]. The payment guarantee shall ensure that the full invoiced amount will be paid to the Seller in the event that the Buyer defaults.
Payment procedure clause with split payment terms
This version divides payments into multiple parts.
The total payment for this Agreement shall be split as follows:[Percentage]% due as an upfront deposit upon signing.[Percentage]% due upon completion of [specific milestone].[Percentage]% due upon final delivery or completion of services. Each payment shall be made within [number] days of the relevant event or invoice.
Payment procedure clause with credit terms
This version provides for credit terms for the Buyer.
The Buyer shall be granted credit terms of [number] days from the invoice date to make payments under this Agreement. The credit limit shall not exceed [amount], and any payments beyond this limit will be subject to approval from the Seller. Late payments will incur a [percentage]% fee per [time period].
Payment procedure clause with escalation for repeated late payments
This version increases penalties for recurring late payments.
If the Buyer fails to make payment within [number] days on two or more occasions during the term of this Agreement, the Seller reserves the right to increase the late payment penalty to [higher percentage]% for subsequent late payments.
Payment procedure clause with partial payment option
This version allows for partial payments.
The Buyer may request to make partial payments for the total amount due, with each installment being due within [number] days of the previous payment. Each partial payment will be equal to [specified amount or percentage] of the total invoice. If any partial payment is missed, the full remaining balance will become due immediately.
Payment procedure clause with international payment terms
This version addresses international payments.
If payment is to be made internationally, the Buyer shall make payment in [currency], via wire transfer to the designated account. The Buyer shall cover any wire transfer fees or international transaction costs. Payments are due within [number] days of the invoice date, and exchange rates will be based on the rate on the date the payment is made.
Payment procedure clause with billing cycle flexibility
This version allows for flexible billing cycles.
The Parties agree to a flexible billing cycle, which may be adjusted by mutual agreement at the beginning of each [month/quarter]. The Buyer may request an extension or shortening of the billing cycle based on business requirements, and both parties must agree to the adjusted payment schedule.
Payment procedure clause with payment audit rights
This version grants the Buyer the right to audit payments.
The Buyer reserves the right to audit the payment history related to this Agreement, including invoices and payment receipts, within [number] days of payment. If discrepancies are found, the Seller will be required to provide clarification and make necessary adjustments.
Payment procedure clause with non-payment consequences
This version outlines the consequences for non-payment.
If the Buyer fails to make payment within [number] days of the due date, the Seller may suspend the performance of services or delivery of goods until payment is made. Repeated non-payment may result in termination of this Agreement.
Payment procedure clause with payment disputes procedure
This version provides a process for resolving payment disputes.
If the Buyer disputes any payment amount, they must notify the Seller within [number] days of receipt of the invoice. The Parties will attempt to resolve the dispute through good faith negotiations. If the dispute cannot be resolved within [number] days, the dispute will be handled through mediation or arbitration.
Payment procedure clause with fixed-rate installments
This version specifies fixed-rate installments for payments.
The total payment for this Agreement shall be made in [number] equal installments, each installment being due on the [specified day] of each month. The first installment is due on [start date], and subsequent installments will follow monthly thereafter.
Payment procedure clause with full payment upon delivery
This version requires full payment upon delivery.
The full payment for the goods and services delivered under this Agreement is due upon delivery or completion of the final service. The Buyer shall make the full payment within [number] days of receiving the goods or services, unless otherwise agreed upon in writing by both parties.
Payment procedure clause with advance payment for certain items
This version requires advance payment for specific items.
The Buyer agrees to make an advance payment of [percentage]% of the total cost of [specific goods or services] upon placing the order. The remaining balance will be paid within [number] days of delivery or completion of the service.
Payment procedure clause with service termination for non-payment
This version includes a termination clause for non-payment.
If payment is not received within [number] days of the due date, the Seller reserves the right to terminate this Agreement immediately. The Buyer will remain responsible for all outstanding payments and any penalties incurred up to the termination date.
Payment procedure clause with partial advance payment
This version requires a partial advance payment before work begins.
The Buyer agrees to pay [percentage]% of the total contract amount as an advance upon signing this Agreement. The remaining balance will be due upon completion of the services or delivery of the goods, payable within [number] days of receipt of the final invoice.
Payment procedure clause with early payment penalty
This version imposes a penalty for early payment.
If the Buyer makes payment prior to the due date, they will incur a penalty fee of [percentage]% of the total invoice amount. The penalty is in addition to the original payment, and the Seller will invoice the Buyer for this additional charge.
Payment procedure clause with installment for large sums
This version breaks a large payment into manageable installments.
The Buyer agrees to pay the total sum of [specified amount] in [number] equal monthly installments of [specified amount]. The first installment is due on [specified date], and each subsequent installment is due on the [day] of each month thereafter. Late installments will incur a [percentage]% penalty fee.
Payment procedure clause with wire transfer fee responsibility
This version specifies that the Buyer is responsible for wire transfer fees.
Payments shall be made by wire transfer to the Seller’s bank account. The Buyer is responsible for any wire transfer fees or other payment processing costs incurred. The Buyer shall ensure that the full invoiced amount is received by the Seller without deductions for such fees.
Payment procedure clause with deferred payment option
This version allows for deferred payment based on specific terms.
The Buyer may defer payment of the total amount for [number] days after the due date, but the deferred amount will incur interest at a rate of [percentage]% per month. Payment must be made in full by the deferred payment date.
Payment procedure clause with conditional payment upon approval
This version allows for payment based on approval.
The Buyer agrees to pay the Seller upon receipt of an invoice, provided that the goods or services meet the specifications outlined in this Agreement. If the goods or services do not meet the specifications, payment will be withheld until the issue is resolved and approval is granted.
Payment procedure clause with payment by cheque
This version allows payments by cheque.
The Buyer shall make payments to the Seller by cheque, which shall be mailed to the Seller’s designated address. Payments must be made within [number] days from the invoice date. The Seller may charge a [percentage]% fee for any returned cheques due to insufficient funds.
Payment procedure clause with post-delivery payment
This version requires payment after delivery.
The Buyer agrees to make full payment within [number] days after the Seller’s delivery of the goods or completion of the services. The Seller will send an invoice with the delivery, and payment is due within the specified period after the Buyer’s receipt of the goods or services.
Payment procedure clause with payment based on receipt of documentation
This version ties payment to receipt of specific documentation.
Payments under this Agreement shall be due within [number] days after the Buyer’s receipt of the required documentation, including but not limited to invoices, shipping receipts, and product inspection reports. If documentation is not received within the designated time, payment will be delayed accordingly.
Payment procedure clause with non-refundable deposit
This version includes a non-refundable deposit requirement.
The Buyer agrees to pay a non-refundable deposit of [percentage]% of the total contract value upon signing this Agreement. The balance is due within [number] days of delivery or completion of services. The deposit will be applied to the total amount owed.
Payment procedure clause with milestone-based payments
This version divides payments based on project milestones.
The total payment for this Agreement will be divided into the following milestones:[Milestone 1]: [Percentage] due upon completion of [task].[Milestone 2]: [Percentage] due upon completion of [task]. Payments are due within [number] days of completion of each milestone, and invoices will be issued accordingly.
Payment procedure clause with buyer confirmation requirement
This version requires the Buyer’s confirmation before payment.
The Buyer shall confirm receipt and acceptance of the goods or services within [number] days of delivery. Payment is due within [number] days after the Buyer’s confirmation. If the Buyer does not confirm within the specified period, the Seller may take legal action to recover the outstanding payment.
Payment procedure clause with price adjustment for late payment
This version includes price adjustments for late payments.
If payment is not received within [number] days after the due date, the Seller reserves the right to adjust the price of the contract based on an increase in costs, including inflation or changes in the cost of raw materials. The Seller will notify the Buyer of any adjustments to the price, and payment will be due at the adjusted rate.
Payment procedure clause with escrow account
This version uses an escrow account for payment.
The Parties agree that payment for goods or services under this Agreement will be placed in an escrow account held by [third-party escrow agent]. The funds will be released to the Seller upon verification of delivery or completion of services, as determined by the Buyer. The escrow fees shall be shared equally between the Parties.
Payment procedure clause with credit facility
This version provides a credit facility for payments.
The Buyer may use a credit facility to make payments under this Agreement, subject to approval by the Seller. The Buyer agrees to repay any outstanding amounts within [number] days of receipt of an invoice, with interest charged at a rate of [percentage]% per month on any overdue balance.
Payment procedure clause with no deductions for fees
This version ensures payments are made in full.
The Buyer shall make all payments in full without deductions for any processing fees, transaction charges, or other costs. If any deductions are made, the Buyer shall reimburse the Seller for the full amount owed, plus any applicable fees, within [number] days.
Payment procedure clause with delayed invoicing allowance
This version allows for delayed invoicing under certain conditions.
The Seller may delay the issuance of invoices for up to [number] days after the delivery of goods or completion of services. In such cases, payment will be due within [number] days of the invoice date, and no late payment penalties will be applied during the delay period.
Payment procedure clause with payment in installments for equipment purchase
This version specifies installment payments for an equipment purchase.
The Buyer agrees to pay the Seller for the equipment in [number] equal installments. The first installment is due upon signing of this Agreement, and the remaining installments are due on [specified dates]. If any installment is not paid on time, the remaining balance becomes due immediately.
Payment procedure clause with non-payment termination right
This version includes a termination right for non-payment.
If the Buyer fails to make any payment within [number] days of the due date, the Seller has the right to terminate this Agreement and suspend performance until full payment is received. In the event of termination, the Buyer will remain responsible for any outstanding amounts owed up to the termination date.
Payment procedure clause with electronic invoicing
This version specifies the use of electronic invoices.
The Seller shall issue electronic invoices to the Buyer’s designated email address. The Buyer agrees to pay each invoice within [number] days of receipt. The Buyer shall notify the Seller within [number] days if there are any discrepancies in the invoice; otherwise, the invoice will be deemed accepted.
Payment procedure clause with disputed payment handling
This version handles disputes over payments.
If the Buyer disputes any payment, they must notify the Seller within [number] days of receipt of the invoice. The Parties will attempt to resolve the dispute within [number] days. During the dispute resolution process, the Buyer shall continue to make payments for any undisputed amounts.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.