Document background
The Prepayment Agreement is essential in Nigerian commercial transactions where significant advance payments are required before the delivery of goods or services. This document type is commonly used in sectors such as manufacturing, construction, and international trade, where substantial upfront financing is necessary. The agreement must comply with Nigerian contract law, financial regulations, and anti-money laundering requirements while providing adequate security mechanisms for the prepaid amounts. It typically includes detailed payment terms, security arrangements, performance obligations, and specific provisions for default scenarios. The document is particularly important in the Nigerian context where businesses often require advance payments to secure resources or commence work, and where proper documentation is crucial for enforceability and dispute resolution.
