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Future Receipts Sale Agreement for the United Kingdom

Future Receipts Sale Agreement Template for England and Wales

A Future Receipts Sale Agreement is a commercial contract governed by English and Welsh law that enables businesses to sell their future income streams in exchange for immediate capital. This agreement structures the sale of future receivables, typically from card payments or other regular income sources, establishing the terms of purchase, collection mechanisms, and obligations of both parties. It includes provisions for calculation methods, collection procedures, and protections for both buyer and seller.

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What is a Future Receipts Sale Agreement?

The Future Receipts Sale Agreement is utilized when businesses seek alternative financing by selling their future income streams. Common in England and Wales, this document provides a framework for merchants to receive upfront capital in exchange for a percentage of their future receipts. The agreement details purchase price, collection methods, reconciliation procedures, and includes provisions for security and default scenarios. It's particularly relevant for businesses with predictable revenue streams seeking non-traditional financing options, offering an alternative to conventional loans while maintaining compliance with English and Welsh commercial law.

What sections should be included in a Future Receipts Sale Agreement?

1. Parties: Identification of buyer and seller with full legal names and addresses

2. Background: Context of the agreement and basic commercial understanding

3. Definitions: Key terms used throughout the agreement including 'Future Receipts', 'Purchase Price', 'Collection Period'

4. Sale and Purchase: Core provisions detailing the sale of future receipts and payment terms

5. Payment Mechanics: Details of how and when payments will be collected

6. Representations and Warranties: Standard and specific warranties about the business and future receipts

7. Covenants: Ongoing obligations of the seller regarding business operation

8. Events of Default: Circumstances constituting default and consequences

9. Boilerplate Provisions: Standard legal provisions including governing law, notices, assignment

What sections are optional to include in a Future Receipts Sale Agreement?

1. Security Arrangements: Details of any security being provided - use when additional security is required

2. Personal Guarantee: Terms of personal guarantee from business owner - use when personal guarantee is required

3. Card Processing Arrangements: Specific provisions relating to card processing - use when receipts include card payments

4. Reconciliation Provisions: Terms for periodic reconciliation of receipts - use when variable collection amounts are used

What schedules should be included in a Future Receipts Sale Agreement?

1. Schedule 1 - Calculation of Future Receipts: Detailed methodology for calculating future receipts

2. Schedule 2 - Collection Process: Detailed procedures for collection of receipts

3. Schedule 3 - Form of Direct Debit Mandate: Standard form for direct debit authorization

4. Schedule 4 - Financial Information: Required financial statements and projections

5. Appendix A - Form of Personal Guarantee: Standard form of personal guarantee if required

6. Appendix B - Security Documents: Forms of any security documents required

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

Sale Agreement

Cost

Free to use
Relevant legal definitions



























Clauses




























Industries

Sale of Goods Act 1979: Primary legislation governing the sale of goods in England and Wales, which may be relevant to the characterization of future receivables as 'goods'

Contracts (Rights of Third Parties) Act 1999: Legislation governing how third parties may enforce terms of a contract, relevant for assignments and transfers of rights

Law of Property Act 1925: Fundamental property law that affects how future property rights can be assigned or transferred

Consumer Credit Act 1974: Regulatory framework for credit arrangements, which may be relevant if the agreement could be characterized as a credit arrangement

Financial Services and Markets Act 2000: Primary legislation governing financial services and markets regulation in the UK

Financial Services and Markets Act 2000 (Regulated Activities) Order 2001: Defines regulated activities and determines whether the arrangement falls under financial services regulation

FCA Regulations: Regulatory requirements if the arrangement falls within the scope of regulated activities

Insolvency Act 1986: Legislation governing insolvency proceedings and creditor rights, crucial for true sale analysis

Enterprise Act 2002: Legislation affecting corporate insolvency and security enforcement

Companies Act 2006: Primary legislation governing company law, including registration of charges and corporate capacity

Common Law Contract Principles: Fundamental principles governing contract formation, consideration, and enforcement

Doctrine of Assignment: Legal principles governing the transfer of rights and obligations under contracts

Rules Against Penalties: Common law principles determining enforceability of penalty clauses in contracts

Set-off Principles: Legal rules governing the rights of parties to set off mutual debts and claims

UK GDPR: Data protection regulations governing the handling of personal data in the transaction

Anti-Money Laundering Regulations: Regulatory requirements for preventing money laundering and terrorist financing

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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