Partial Payment Agreement Template

Partial Payment Agreement Template

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

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

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

Creditor and Debtor may each be referred to as a “Party” and together as the “Parties.”

1. Background and Existing Debt

1.1 Existing Obligation.
Debtor acknowledges owing Creditor money in connection with the following obligation:

• Type of obligation: [e.g., “unpaid invoices for goods/services,” “loan agreement,” “credit account”]

• Original agreement or account reference: [Contract / Account / Loan / Purchase Order No.]

• Related invoice numbers and dates (if any): [Invoice No. and Date]

1.2 Outstanding Amount.
As of the Effective Date, the total amount owed to Creditor before this Agreement is:

• Principal outstanding: [Currency and Amount]

• Accrued interest and/or late fees (if any): [Currency and Amount]

• Total outstanding balance: [Currency and Amount]

1.3 Acknowledgment of Debt.
Debtor acknowledges that, as of the Effective Date, the above debt is valid and owing and is not currently disputed.

2. Partial Payment Terms

2.1 Partial Payment Amount.
Debtor agrees to pay Creditor the partial amount of [Currency and Amount] (the “Partial Payment”).

2.2 Due Date for Partial Payment.
Debtor shall pay the Partial Payment on or before [Due Date].

2.3 Payment Method.
The Partial Payment shall be made in [Currency] by [Bank Transfer / Check / Electronic Transfer / Other] to:

• Account Name: [Account Name]

• Bank Name: [Bank Name]

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

• SWIFT / BIC (if applicable): [SWIFT/BIC]

• Payment reference: [Reference Debtor should include]

3. Effect of Partial Payment on Remaining Balance

[Select one of the options below and delete the other in the final document.]

Option A – Partial Payment as Full and Final Settlement

3.1 Full Satisfaction.
Upon Creditor’s receipt and clearance of the full Partial Payment by the due date in Section 2.2, the Parties agree that:

• The Partial Payment is accepted as full and final settlement of the total outstanding balance described in Section 1.2; and

• The remaining portion of the original debt shall be permanently forgiven, and Debtor shall have no further payment obligations to Creditor arising from that debt.

3.2 Release.
Upon full and timely receipt of the Partial Payment under this Option A, Creditor will treat the original debt as paid in full and will not pursue further collection of the forgiven portion.

Option B – Partial Payment Only (Balance Still Owed)

3.3 Credit Against Balance.
The Partial Payment will be credited against the total outstanding balance described in Section 1.2.

3.4 Remaining Balance.
After Creditor receives the Partial Payment, the remaining balance will be:

• Remaining balance: [Currency and Amount]

This remaining balance shall continue to be owed by Debtor under the original agreement or any separate repayment arrangement, subject to any updated payment plan the Parties may agree to in writing.

4. Additional Conditions (If Any)

4.1 Conditions to Settlement or Forgiveness (if applicable).
Any forgiveness or settlement under this Agreement may be conditioned on one or more of the following, if specified:

• Timely receipt of the Partial Payment by the due date;

• No reversal or chargeback of the Partial Payment;

• Compliance with any additional conditions listed here:

  • [Condition 1]

  • [Condition 2]

4.2 Effect of Non-Compliance.
If Debtor fails to satisfy the conditions in this Agreement (including payment by the due date), Creditor may treat this Agreement as void and may pursue the original debt, less any amounts actually received, to the extent allowed by law.

5. Representations

5.1 Debtor Representations.
Debtor represents that:

• Debtor has read and understands this Agreement;

• Debtor has the legal capacity and authority to enter into this Agreement; and

• Debtor is not relying on any promises or statements about the debt other than those written in this Agreement.

5.2 Creditor Representations.
Creditor represents that Creditor has the right to receive payment of the debt described in Section 1 and to enter into this Agreement.

6. Default and Remedies

6.1 Default.
Debtor will be in default under this Agreement if:

• Debtor does not pay the Partial Payment in full by the due date in Section 2.2; or

• Debtor materially breaches any other obligation under this Agreement and does not fix the breach within [Number] days after written notice from Creditor.

6.2 Consequences of Default.
If Debtor is in default:

• Creditor is not bound by any forgiveness, release, or settlement terms in this Agreement; and

• Creditor may pursue any rights and remedies available under the original contract, this Agreement, or applicable law, including collection of the full outstanding balance (minus any payments already received).

7. Notices

7.1 Form of Notice.
Any formal notice under this Agreement must be in writing and sent by hand, courier, mail, or email to the contact details listed for each Party at the beginning of this Agreement, or to any new details provided in writing.

7.2 Receipt of Notice.
Notices will be deemed received on the date of actual delivery or, for email, on the date sent if no error or bounce-back message is received.

8. Governing Law and Dispute Resolution

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

8.2 Dispute Resolution.
If a dispute arises in connection with this Agreement, the Parties shall first attempt in good faith to resolve it through informal discussions. If they cannot resolve the dispute within [Number] days after one Party sends written notice of the dispute, either Party may pursue [court proceedings / mediation / arbitration] in [City, State/Province, Country].

9. Miscellaneous

9.1 Entire Agreement.
This Agreement is the entire agreement between the Parties regarding the Partial Payment and its effect on the existing debt. It replaces any prior oral or written discussions about the same Partial Payment.

9.2 Amendments.
Any change to this Agreement must be in writing and signed by both Parties.

9.3 No Waiver.
If either Party does not enforce a right under this Agreement, it does not mean that Party has given up that right in the future.

9.4 Severability.
If any provision of this Agreement is found invalid or unenforceable, the remaining provisions will remain in full force and effect.

9.5 Assignment.
Debtor may not assign or transfer this Agreement without Creditor’s written consent. Creditor may assign this Agreement or the underlying debt in accordance with applicable law, upon written notice to Debtor.

9.6 Counterparts and Electronic Signatures.
This Agreement may be signed in counterparts. Electronic or scanned signatures shall be treated as originals.

10. Signatures

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

Creditor

Signature: _______________________________
Name: [Creditor Signatory Name]
Title: [Title, if applicable]
Date: [Date]

Debtor

Signature: _______________________________
Name: [Debtor Signatory Name]
Title: [Title, if applicable]
Date: [Date]