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The Full and Final Payment Agreement is a critical legal instrument in South African commercial and civil law, designed to provide a definitive resolution to debt obligations. It is typically used when parties wish to settle an outstanding debt, often for a reduced amount, and need to document the terms of settlement with legal certainty. This document becomes essential in scenarios involving debt restructuring, dispute resolution, or when a debtor proposes to settle an outstanding amount through a lump sum or structured payment plan. The agreement must comply with South African legislation, including the National Credit Act, Consumer Protection Act, and relevant common law principles. It serves to protect both creditor and debtor by clearly documenting the settlement terms and preventing future claims related to the settled debt. The document is particularly valuable in commercial dealings, debt collection processes, and financial dispute resolutions within the South African jurisdiction.

1. Parties: Identifies and defines all parties to the agreement, including their full legal names, registration/identity numbers, and physical addresses

2. Background: Outlines the context of the agreement, including the origin of the debt, any previous agreements or disputes, and the parties' intention to settle

3. Definitions and Interpretation: Defines key terms used in the agreement and establishes rules for interpreting the document

4. Acknowledgment of Debt: Details the original debt amount, any interest or charges, and the total amount acknowledged as owing

5. Settlement Amount: Specifies the agreed-upon settlement amount and whether it represents a full or partial discount of the original debt

6. Payment Terms: Details the payment method, due date(s), and any installment arrangements

7. Full and Final Settlement: Confirms that payment of the settlement amount constitutes full and final settlement of all claims between the parties

8. Breach and Consequences: Outlines what constitutes breach and the consequences, including any revival of the original debt

9. Non-Admission of Liability: States that the agreement does not constitute an admission of liability by either party

10. General Terms: Standard contractual provisions including governing law, jurisdiction, and entire agreement clause