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The Master Factoring Agreement is a fundamental document used in Indian factoring transactions to establish a continuing relationship between factors and their clients. It serves as the primary contract governing the purchase of accounts receivable, providing businesses with a reliable source of working capital financing. The agreement, regulated under the Factoring Regulation Act 2011 and RBI guidelines, sets out the complete framework for multiple future receivables purchases, including detailed provisions for pricing, credit assessment, collection procedures, and risk management. This Master Factoring Agreement is particularly crucial in the Indian context where businesses increasingly seek alternative financing solutions, and it includes specific provisions to ensure compliance with local regulatory requirements, GST implications, and electronic transaction laws.

1. Parties: Identification of the Factor and the Client (including registration details as per Indian law)

2. Background: Context of the agreement, brief description of the parties' businesses, and purpose of the factoring arrangement

3. Definitions and Interpretation: Comprehensive definitions of terms used in the agreement, including specific Indian regulatory terms

4. Scope of Factoring Arrangement: Details of the factoring services, types of receivables covered, and nature of the assignment

5. Purchase of Receivables: Process for offering and accepting receivables, pricing mechanism, and purchase price calculation

6. Client Representations and Warranties: Standard and specific warranties regarding the business, receivables, and compliance with Indian laws

7. Factor's Rights and Obligations: Rights and duties of the factor, including collection rights and reporting obligations

8. Client's Covenants: Ongoing obligations of the client, including operational requirements and information provision

9. Security and Credit Protection: Security arrangements, guarantees, and credit protection mechanisms

10. Fees and Charges: Detailed fee structure, including factoring commission, interest, and other charges

11. Collection and Settlement: Procedures for collection, remittance of funds, and settlement of accounts

12. Events of Default: Circumstances constituting default and consequences thereof

13. Term and Termination: Duration of the agreement, renewal provisions, and termination rights

14. Indemnification: Mutual indemnification obligations and limitations

15. Confidentiality: Protection of confidential information and trade secrets

16. Notices: Method and addresses for serving notices under the agreement

17. Governing Law and Jurisdiction: Indian law as governing law and jurisdiction clause

18. Dispute Resolution: Mechanism for resolving disputes, typically through arbitration in India

19. Miscellaneous: Standard boilerplate provisions including severability, entire agreement, and amendments