Advance Payment Agreement Template

Advance Payment Agreement Template

This Advance Payment Agreement (“Agreement”) is made and entered into as of [Date] (“Effective Date”) by and between:

Service Provider / Seller:
[Provider Legal Name]
[Entity Type, e.g., “Limited Liability Company”]
[Registered Address]
[City, State/Province, ZIP/Postal Code, Country]
Contact: [Contact Person Name]
Email: [Contact Email]
Phone: [Contact Phone Number]

Customer / Client:
[Customer Legal Name]
[Entity Type or “Individual”]
[Address]
[City, State/Province, ZIP/Postal Code, Country]
Contact: [Contact Person Name]
Email: [Contact Email]
Phone: [Contact Phone Number]

Provider and Customer are sometimes referred to individually as a “Party” and together as the “Parties.”

1. Purpose of the Agreement

The purpose of this Agreement is to set out the terms under which Customer will make an advance payment to Provider and how that payment will be applied to the price of the goods and/or services described below.

2. Description of Goods and/or Services

Provider agrees to provide the following goods and/or services (“Services” and/or “Goods”):

[Description of Goods and/or Services, including any key specifications, project name, or order reference]

If applicable, additional details may be attached as Exhibit A – Scope of Work / Order Details and are incorporated into this Agreement.

3. Advance Payment Amount and Due Date

3.1 Advance Payment Amount.
Customer shall pay to Provider an advance payment in the total amount of [Advance Amount in Figures and Currency] ([Advance Amount in Words]) (“Advance Payment”).

3.2 Due Date.
The Advance Payment shall be paid on or before [Advance Due Date].

3.3 Payment Method.
The Advance Payment shall be made by [Bank Transfer / Credit Card / Check / Other] to the following account or payment details:

• Account Name: [Account Name]

• Bank Name: [Bank Name]

• Account Number / IBAN: [Account Number / IBAN]

• SWIFT / BIC: [SWIFT/BIC]

• Reference: [Reference to Include on Payment]

4. Application of Advance Payment

4.1 Credit Against Total Price.
The Advance Payment will be credited against the total contract price of [Total Contract Price, if known] for the Goods/Services under this Agreement.

4.2 Invoices and Statements.
Provider shall issue invoices or statements showing:

• Total price for Goods/Services;

• Amount of the Advance Payment applied; and

• Any remaining balance due or overpayment.

4.3 Remaining Balance.
Any remaining balance after application of the Advance Payment shall be paid by Customer as follows:

• Remaining Balance Amount: [Amount or formula, if known]

• Due Date(s) for Remaining Balance: [Single date or schedule, e.g., milestones, delivery date, monthly billing]

5. Nature of the Advance Payment (Refundable or Non-Refundable)

5.1 Refund Status.
The Parties agree that the Advance Payment is:

• [Select one and delete the others:]

  • Fully refundable in accordance with Section 6 of this Agreement.

  • Partially refundable in accordance with Section 6 of this Agreement.

  • Non-refundable, except as required by law or as expressly stated in this Agreement.

5.2 Purpose of Advance.
The Advance Payment may be used by Provider to cover initial costs, materials, reservations, scheduling, or other expenses related to the Goods/Services.

6. Cancellations, Changes, and Refunds

6.1 Cancellation by Customer.
If Customer wishes to cancel or significantly change the order or Services, Customer shall provide written notice to Provider at: [Provider Contact Email].

6.2 Refund Rules.
Refunds of the Advance Payment, if applicable, will be handled as follows:

• Cancellation received on or before [Date or Time Period]: [Refund Percentage or Amount].

• Cancellation received after [Date or Time Period] but before [Later Date]: [Refund Percentage or Amount].

• Cancellation received on or after [Final Date or Time Period]: [Refund Percentage or Amount].

6.3 Cancellation by Provider.
If Provider cancels the order or Services for reasons not caused by Customer, Provider shall:

• Refund [Refund Percentage or Amount] of the Advance Payment; and/or

• Offer alternative dates, products, or Services, if mutually agreed.

6.4 Force Majeure.
If performance is prevented or delayed by events beyond a Party’s reasonable control (including natural disasters, war, major infrastructure failures, or similar events), the Parties shall attempt to reschedule or adjust the Agreement. Any refund or credit of the Advance Payment in such cases shall be negotiated in good faith and in accordance with applicable law.

7. Delivery, Performance, and Timeline

7.1 Delivery / Performance Dates.
Provider shall use reasonable efforts to deliver the Goods and/or perform the Services on or by: [Delivery or Completion Date(s), or “according to the schedule in Exhibit A”].

7.2 Delays.
If Provider reasonably anticipates a delay, Provider shall notify Customer in writing and propose updated dates or a revised schedule.

7.3 Customer Responsibilities.
Customer shall provide timely access, information, approvals, or materials required for Provider to perform the Services, including:

• [Customer responsibilities, such as providing content, access to premises, approvals, etc.]

8. Price, Taxes, and Additional Costs

8.1 Price.
Unless otherwise agreed in writing, the agreed price for the Goods/Services is: [Total Price in Figures and Currency] ([Total Price in Words]).

8.2 Taxes.
Unless stated otherwise, prices are [inclusive / exclusive] of applicable taxes. Customer shall be responsible for any applicable sales, value-added, or similar taxes, except taxes based on Provider’s income.

8.3 Additional Costs.
Any additional costs not included in the above price (e.g., shipping, travel, special materials) must be pre-approved in writing by Customer or clearly described in Exhibit A.

9. Warranties and Limitations

9.1 Provider Warranties.
Provider warrants that it will perform the Services in a professional manner and deliver Goods that match the agreed description.

9.2 Customer Warranties.
Customer warrants that it has the right to enter into this Agreement and has provided accurate information relevant to the Services or Goods.

9.3 Limitation of Liability.
To the extent permitted by law, neither Party shall be liable for any indirect, incidental, or consequential damages arising out of or in connection with this Agreement. Direct damages, if any, shall be limited to an amount not exceeding [Cap Amount or “the total sums paid by Customer under this Agreement”], unless otherwise required by law.

10. Confidentiality (Optional)

10.1 Confidential Information.
Each Party may receive non-public information from the other Party in connection with this Agreement (“Confidential Information”).

10.2 Obligations.
Each Party agrees to keep the other Party’s Confidential Information secure and not to disclose it to third parties, except to employees or contractors who need to know it for purposes of this Agreement and are bound by similar confidentiality obligations.

11. Term and Termination

11.1 Term.
This Agreement begins on the Effective Date and continues until the Goods/Services have been delivered and all payments have been made, unless terminated earlier according to this Section.

11.2 Termination for Cause.
Either Party may terminate this Agreement by written notice if the other Party materially breaches this Agreement and does not cure the breach within [Number] days after receiving written notice of the breach.

11.3 Effect of Termination.
Upon termination, the Parties shall:

• Settle any outstanding invoices;

• Apply or refund the Advance Payment according to Sections 4, 5, and 6; and

• Return any property belonging to the other Party, where applicable.

12. Dispute Resolution and Governing Law

12.1 Good-Faith Negotiation.
If a dispute arises, the Parties will first attempt to resolve it in good faith through informal discussions.

12.2 Dispute Resolution Method (select and adjust as applicable):

• Mediation before litigation or arbitration.

• Binding arbitration under the rules of [Arbitration Institution] in [City, Country].

• Court proceedings in the courts of [Jurisdiction].

12.3 Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of [State/Province, Country], without regard to its conflict-of-laws principles.

13. Miscellaneous

13.1 Entire Agreement.
This Agreement, together with any attached exhibits, is the entire agreement between the Parties regarding the subject matter and supersedes all prior oral or written discussions.

13.2 Amendments.
Any changes to this Agreement must be in writing and signed by both Parties.

13.3 Assignment.
Neither Party may assign or transfer this Agreement without the prior written consent of the other Party, except to a successor in interest of substantially all of its business or assets.

13.4 Notices.
All formal notices under this Agreement shall be in writing and sent to the contact details stated at the beginning of the Agreement, or to any updated address provided in writing.

13.5 Severability.
If any provision of this Agreement is found invalid or unenforceable, the remaining provisions shall continue in full force and effect.

13.6 Counterparts and Electronic Signatures.
This Agreement may be executed in counterparts, each of which is deemed an original. Signatures transmitted by electronic means (including scanned or digital signatures) shall be treated as originals.

14. Signatures

IN WITNESS WHEREOF, the Parties have executed this Advance Payment Agreement as of the Effective Date written above.

Service Provider / Seller

Signature: ___________________________
Name: [Authorized Signatory Name]
Title: [Title]
Date: [Date]

Customer / Client

Signature: ___________________________
Name: [Authorized Signatory Name]
Title: [Title, if applicable]
Date: [Date]