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A Deferment Agreement is utilized when parties need to formally modify payment terms of an existing obligation under German law. This document becomes necessary when a debtor requires additional time to meet their payment obligations, but both parties wish to maintain their business relationship and avoid default scenarios. The agreement must comply with the German Civil Code (BGB) requirements for contract modifications and should clearly document the original obligation, the agreed deferment terms, and any additional conditions. Common scenarios for using a Deferment Agreement include temporary business difficulties, project delays affecting cash flow, or strategic financial restructuring. The document typically includes detailed payment schedules, any applicable interest calculations, and may involve additional security arrangements. It's particularly important to ensure the agreement maintains the enforceability of the original obligation while providing clear terms for the modified payment structure.
