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The Accounts Receivable Agreement is a fundamental document used in Indian business and financial transactions to facilitate the sale, assignment, or financing of accounts receivable. This agreement becomes necessary when companies seek to improve their working capital position, obtain financing, or outsource their receivables management. It is particularly relevant in the Indian context where businesses must navigate specific regulatory requirements, including those set by the Reserve Bank of India, while managing their trade receivables. The agreement typically includes comprehensive details about the receivables being transferred, pricing mechanisms, collection procedures, representations and warranties, and compliance requirements. It serves various business purposes, from straightforward receivables sales to complex structured finance transactions, and must be carefully drafted to ensure enforceability under Indian law while meeting the commercial objectives of the parties involved.

1. Parties: Identification of the parties entering into the agreement, including their legal names, registration details, and addresses

2. Background: Context of the agreement, including the business relationship and purpose of the arrangement

3. Definitions and Interpretation: Detailed definitions of terms used throughout the agreement and rules for interpreting the agreement

4. Assignment of Receivables: Core terms regarding the transfer or management of receivables, including the scope and nature of the assignment

5. Purchase Price and Payment Terms: Details of consideration, payment mechanics, and timing of payments for the receivables

6. Representations and Warranties: Statements of fact and assurances from both parties regarding their capacity, authority, and the receivables

7. Covenants: Ongoing obligations of both parties throughout the term of the agreement

8. Collection and Servicing: Procedures for collecting receivables and managing the collection process

9. Records and Reporting: Requirements for maintaining records and providing reports on receivables and collections

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

11. Remedies: Rights and remedies available to parties in case of default or breach

12. Term and Termination: Duration of the agreement and circumstances under which it can be terminated

13. Confidentiality: Obligations regarding confidential information shared between parties

14. Governing Law and Jurisdiction: Specification of Indian law as governing law and jurisdiction for disputes

15. Notices: Process and requirements for formal communications between parties

16. Miscellaneous: Standard boilerplate provisions including severability, entire agreement, amendments, etc.