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Deferment Agreement for the United Kingdom

Deferment Agreement Template for England and Wales

A Deferment Agreement is a legal document governed by the laws of England and Wales that formally establishes the terms and conditions under which a payment or performance obligation is postponed to a later date. It outlines the new payment schedule, any interest charges, security arrangements, and the consequences of default. The agreement provides legal certainty for both parties while maintaining the enforceability of the original obligation under English law.

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What is a Deferment Agreement?

A Deferment Agreement becomes necessary when parties need to formally restructure payment or performance obligations due to various circumstances such as financial constraints, business restructuring, or mutual commercial benefit. Under English and Welsh law, this agreement provides a legally binding framework that protects both parties' interests while modifying the original payment terms. The document typically includes specific details about the deferred amount, new payment schedule, any applicable interest, security arrangements, and default provisions. This type of agreement is particularly crucial in maintaining business relationships while managing cash flow and operational challenges.

What sections should be included in a Deferment Agreement?

1. Parties: Identifies and defines the parties to the agreement

2. Background: Sets out the context and purpose of the deferment arrangement

3. Definitions: Defines key terms used throughout the agreement

4. Deferment Terms: Details of what is being deferred, for how long, and under what conditions

5. Payment Terms: Specifies payment arrangements, including any interest

6. Duration: Specifies the term of the deferment

7. Termination: Conditions under which the agreement can be terminated

What sections are optional to include in a Deferment Agreement?

1. Security Provisions: Details of any security provided for the deferred amount - include when security is required for the deferment

2. Interest Provisions: Details of any interest charged during deferment - include when interest is to be charged

3. Early Payment Provisions: Terms for early repayment - include when early repayment is permitted

4. Force Majeure: Provisions for unforeseen circumstances - include for long-term deferment arrangements

What schedules should be included in a Deferment Agreement?

1. Payment Schedule: Detailed breakdown of payment dates and amounts

2. Security Details: Details of any security arrangements

3. Original Agreement: Copy of the agreement being deferred

4. Notice Details: Contact information for formal notices

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

England and Wales

Publisher

Genie AI

Document Type

Payment Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions




















Clauses


























Industries

Law of Property Act 1925: Fundamental legislation governing property law in England and Wales, essential for any property-related aspects of the deferment agreement

Unfair Contract Terms Act 1977: Regulates unfair terms in contracts, ensuring the agreement's terms are fair and enforceable

Consumer Rights Act 2015: Relevant if one party is a consumer, protecting consumer rights and regulating unfair terms in consumer contracts

Late Payment of Commercial Debts (Interest) Act 1998: Governs interest charges on late commercial payments, crucial for payment deferment terms

Consumer Credit Act 1974: Applies to consumer credit arrangements, potentially relevant if the deferment involves consumer credit

Financial Services and Markets Act 2000: Relevant if the deferment agreement involves regulated financial services or products

Law of Property (Miscellaneous Provisions) Act 1989: Contains requirements for creation of legal interests in property and formal requirements for contracts

Land Registration Act 2002: Relevant if the deferment agreement involves registered land or property rights

Limitation Act 1980: Sets time limits for enforcing legal rights and bringing claims under the agreement

Insolvency Act 1986: Provides framework for handling situations where a party becomes insolvent during the deferment period

UK GDPR: Regulates the processing of personal data, relevant for data protection aspects of the agreement

Data Protection Act 2018: UK's implementation of data protection requirements, complementing UK GDPR

Civil Procedure Rules: Governs court procedures for enforcing the agreement if disputes arise

Contracts (Rights of Third Parties) Act 1999: Determines when third parties can enforce terms of the agreement

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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