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Supplier Credit Agreement for United Arab Emirates

Supplier Credit Agreement Template for United Arab Emirates

A comprehensive legal agreement governed by UAE law that establishes the terms and conditions under which a supplier extends credit to a buyer for goods or services. The document incorporates UAE commercial law requirements, including provisions for interest/profit rates in compliance with local regulations, security arrangements, and dispute resolution mechanisms. It addresses payment terms, credit limits, conditions precedent, and default scenarios while ensuring compliance with UAE Federal Laws including the Civil Code and Commercial Code.

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What is a Supplier Credit Agreement?

The Supplier Credit Agreement is a crucial commercial document used when a supplier wishes to extend credit facilities to a buyer for the purchase of goods or services in the UAE market. This agreement type is particularly relevant in business-to-business transactions where immediate payment isn't required or practical. The document must comply with UAE Federal Laws, including the Civil Code (Federal Law No. 5 of 1985) and Commercial Code (Federal Law No. 18 of 1993), while potentially incorporating Islamic finance principles where applicable. It outlines credit limits, payment terms, security arrangements, and default remedies, providing legal protection for both parties while ensuring enforceability under UAE jurisdiction.

What sections should be included in a Supplier Credit Agreement?

1. Parties: Identification and details of the supplier (creditor) and buyer (debtor), including their legal status and registered addresses

2. Background: Context of the supply relationship and purpose of the credit arrangement

3. Definitions: Definitions of key terms used throughout the agreement

4. Credit Facility: Details of the credit amount, purpose, and general terms of the facility

5. Payment Terms: Payment schedule, interest/profit rates, calculation methods, and payment mechanisms

6. Conditions Precedent: Conditions that must be satisfied before the credit facility becomes available

7. Representations and Warranties: Standard declarations by both parties regarding their capacity and authority

8. Covenants: Ongoing obligations of the buyer during the credit period

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

10. Termination: Conditions and process for early termination

11. Governing Law and Jurisdiction: Specification of UAE law as governing law and jurisdiction for disputes

What sections are optional to include in a Supplier Credit Agreement?

1. Security: Details of any collateral or security arrangements, used when credit facility requires specific security

2. Insurance: Requirements for insurance coverage, included when specific risks need to be covered

3. Assignment: Rights and restrictions regarding assignment of the agreement, included for larger credit facilities

4. Force Majeure: Provisions for unforeseen circumstances, included when specific risk allocation is needed

5. Confidentiality: Provisions for protecting sensitive information, included when dealing with confidential business information

6. Islamic Finance Compliance: Specific provisions ensuring compliance with Shariah principles, included when Islamic finance structure is required

What schedules should be included in a Supplier Credit Agreement?

1. Schedule 1 - Payment Schedule: Detailed breakdown of payment dates, amounts, and calculation methods

2. Schedule 2 - Supply Terms: Specific terms related to the supply of goods or services under credit

3. Schedule 3 - Security Details: Detailed description of any security or collateral arrangements

4. Schedule 4 - Form of Drawdown Notice: Template for requesting drawdown under the credit facility

5. Schedule 5 - Conditions Precedent Documents: List of required documents and conditions to be satisfied

6. Appendix A - Calculation of Interest/Profit: Detailed methodology for calculating interest or profit rates

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Publisher

Ƶ

Document Type

Financing Agreement

Cost

Free to use
Relevant legal definitions


































Clauses






























Relevant Industries

Manufacturing

Retail

Construction

Technology

Automotive

Industrial Equipment

Healthcare

Energy

Telecommunications

Trading and Distribution

Agriculture

Logistics and Supply Chain

Relevant Teams

Legal

Finance

Procurement

Treasury

Credit Control

Risk Management

Commercial Operations

Supply Chain

Accounts Receivable

Corporate Finance

Relevant Roles

Chief Financial Officer

Finance Director

Credit Manager

Procurement Manager

Commercial Director

Legal Counsel

Treasury Manager

Accounts Receivable Manager

Risk Manager

Contract Manager

Supply Chain Manager

Financial Controller

Industries







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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