New Jersey General Form of Factoring Agreement - Assignment of Accounts Receivable

• Category: Contracts - Factoring
• State: Multi-State
• Control #: US-0270BG
• Format: Word; Rich Text

Description

This form is a factoring agreement for the assignment of accounts receivable. Factoring is a financial transaction in which a firm sells its accounts receivable invoices to a third party called a factoring firm at a discount, so that it receives immediate money to continue its business. The factoring firm pays a percentage of the invoices immediately. Firms often factor receivables to improve their cash flow. The New Jersey General Form of Factoring Agreement — Assignment of Accounts Receivable is a legal document that outlines the terms and conditions of a factoring arrangement between a business (known as the "Assignor") and a financial institution or factor (known as the "Assignee"). This agreement allows the Assignor to sell their accounts receivable to the Assignee in exchange for immediate cash flow. In this factoring agreement, the Assignor assigns all of their current and future accounts receivable to the Assignee, including invoices and outstanding payments owed by customers. The Assignor transfers the ownership rights and legal title of these receivables to the Assignee, who takes responsibility for collecting payments from the customers. The New Jersey General Form of Factoring Agreement — Assignment of Accounts Receivable contains various clauses and provisions that are essential for securing the rights and obligations of both parties involved. These include: 1. Assignment of Accounts Receivable: This clause states that the Assignor assigns their accounts receivable to the Assignee and allows the Assignee to collect payments from the customers directly. 2. Purchase Price: This section specifies the purchase price or advance rate at which the Assignee agrees to buy the accounts receivable. It may be a percentage of the face value (typically ranging from 70% to 90%) and is determined based on factors such as creditworthiness of the customers and quality of the receivables. 3. Representations and Warranties: This clause outlines the assurances made by the Assignor regarding the accuracy, validity, and completeness of the assigned accounts receivable. It ensures that the Assignor has the legal right to transfer the receivables and that they are free from any encumbrances or disputes. 4. Collection of Accounts: This provision explains the responsibilities of the Assignee in collecting the assigned accounts receivable. It details the procedures the Assignee will follow, the timeline for collection, and any recourse available in case of non-payment or disputes. 5. Default and Termination: This section highlights the events that could lead to a default under the agreement, such as non-payment of invoices or breach of other terms. It also specifies the rights of both parties in case of default, including termination of the agreement and recovery of outstanding amounts. Different types of New Jersey General Form of Factoring Agreement — Assignment of Accounts Receivable may vary in terms of specific clauses and provisions tailored to meet the unique requirements of different industries or businesses. Some variations may include: — Recourse and Non-Recourse Factoring Agreement: Recourse factoring holds the Assignor responsible for repurchasing any uncollectible accounts from the Assignee, whereas non-recourse factoring absolves the Assignor from such liability. — Notification and Non-Notification Factoring Agreement: Notification factoring requires the Assignee to notify the customers about the assignment, whereas non-notification factoring does not require customer notification. — Confidential and Disclosed Factoring Agreement: Confidential factoring keeps the factoring arrangement confidential, meaning the customers are not aware of the Assignee's involvement in the collection process. Disclosed factoring, on the other hand, reveals the involvement of the Assignee to the customers. In conclusion, the New Jersey General Form of Factoring Agreement — Assignment of Accounts Receivable is a comprehensive legal document that facilitates the transfer of accounts receivable from a business to a financial institution. Employing various clauses and provisions, this agreement ensures a smooth factoring process while protecting the rights and interests of both parties involved.

The New Jersey General Form of Factoring Agreement — Assignment of Accounts Receivable is a legal document that outlines the terms and conditions of a factoring arrangement between a business (known as the "Assignor") and a financial institution or factor (known as the "Assignee"). This agreement allows the Assignor to sell their accounts receivable to the Assignee in exchange for immediate cash flow. In this factoring agreement, the Assignor assigns all of their current and future accounts receivable to the Assignee, including invoices and outstanding payments owed by customers. The Assignor transfers the ownership rights and legal title of these receivables to the Assignee, who takes responsibility for collecting payments from the customers. The New Jersey General Form of Factoring Agreement — Assignment of Accounts Receivable contains various clauses and provisions that are essential for securing the rights and obligations of both parties involved. These include: 1. Assignment of Accounts Receivable: This clause states that the Assignor assigns their accounts receivable to the Assignee and allows the Assignee to collect payments from the customers directly. 2. Purchase Price: This section specifies the purchase price or advance rate at which the Assignee agrees to buy the accounts receivable. It may be a percentage of the face value (typically ranging from 70% to 90%) and is determined based on factors such as creditworthiness of the customers and quality of the receivables. 3. Representations and Warranties: This clause outlines the assurances made by the Assignor regarding the accuracy, validity, and completeness of the assigned accounts receivable. It ensures that the Assignor has the legal right to transfer the receivables and that they are free from any encumbrances or disputes. 4. Collection of Accounts: This provision explains the responsibilities of the Assignee in collecting the assigned accounts receivable. It details the procedures the Assignee will follow, the timeline for collection, and any recourse available in case of non-payment or disputes. 5. Default and Termination: This section highlights the events that could lead to a default under the agreement, such as non-payment of invoices or breach of other terms. It also specifies the rights of both parties in case of default, including termination of the agreement and recovery of outstanding amounts. Different types of New Jersey General Form of Factoring Agreement — Assignment of Accounts Receivable may vary in terms of specific clauses and provisions tailored to meet the unique requirements of different industries or businesses. Some variations may include: — Recourse and Non-Recourse Factoring Agreement: Recourse factoring holds the Assignor responsible for repurchasing any uncollectible accounts from the Assignee, whereas non-recourse factoring absolves the Assignor from such liability. — Notification and Non-Notification Factoring Agreement: Notification factoring requires the Assignee to notify the customers about the assignment, whereas non-notification factoring does not require customer notification. — Confidential and Disclosed Factoring Agreement: Confidential factoring keeps the factoring arrangement confidential, meaning the customers are not aware of the Assignee's involvement in the collection process. Disclosed factoring, on the other hand, reveals the involvement of the Assignee to the customers. In conclusion, the New Jersey General Form of Factoring Agreement — Assignment of Accounts Receivable is a comprehensive legal document that facilitates the transfer of accounts receivable from a business to a financial institution. Employing various clauses and provisions, this agreement ensures a smooth factoring process while protecting the rights and interests of both parties involved.