Utah 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. Utah General Form of Factoring Agreement — Assignment of Accounts Receivable A Utah General Form of Factoring Agreement — Assignment of Accounts Receivable is a legally binding contract between a business (referred to as the "Client") and a financial institution (referred to as the "Factor"). This agreement facilitates the process of factoring, where the Factor purchases the Client's accounts receivable at a discount in exchange for immediate cash flow. The Utah General Form of Factoring Agreement outlines the terms and conditions under which the Client assigns their rights to collect payments from their customers to the Factor. The agreement typically includes the following key elements: 1. Parties involved: Identifies the names and addresses of the Client and the Factor. 2. Assignment of accounts receivable: The Client assigns all accounts receivable, including the associated rights, title, and interest, to the Factor. This allows the Factor to collect payments directly from the Client's customers. 3. Purchase price: Specifies the discount rate or the percentage of the total accounts receivable that the Factor agrees to purchase from the Client. The purchase price is typically a percentage of the face value of the invoices, minus any fees or charges. 4. Repurchase obligations: Outlines the Client's responsibility to repurchase any uncollectible accounts receivable or invoices that the Factor cannot collect due to customer defaults or disputes. 5. Payment terms: Specifies how and when the Factor will remit payment to the Client for the purchased accounts receivable. This may include details such as the frequency of payments and any applicable fees. 6. Notification requirements: States the Client's obligation to notify the Factor of any changes in the business's ownership, contact information, or financial status. 7. Termination provisions: Describes the circumstances under which either party can terminate the agreement, including notice requirements and any penalties associated with early termination. Different types of Utah General Form of Factoring Agreement — Assignment of Accounts Receivable may exist based on the specific needs and preferences of the Client and the Factor. These variations may include: 1. Recourse factoring agreement: The Client retains the ultimate responsibility for any uncollected invoices, even after the sale to the Factor. If any accounts become uncollectible, the Factor can demand that the Client repurchase them. 2. Non-recourse factoring agreement: The Factor assumes the risk of non-payment by the Client's customers. If any invoices become uncollectible due to customer defaults, the Factor absorbs the loss instead of demanding repayment from the Client. 3. With notice factoring agreement: Requires the Client to provide advance notice to the customers before assigning their accounts receivable to the Factor. This minimizes any confusion or disputes between the customers and the Factor. It is essential for both the Client and the Factor to carefully review and understand the terms specified in the Utah General Form of Factoring Agreement — Assignment of Accounts Receivable before entering into the agreement. Seeking legal counsel is advisable to ensure compliance with Utah state laws and to address any specific requirements or provisions desired by either party.

Utah General Form of Factoring Agreement — Assignment of Accounts Receivable A Utah General Form of Factoring Agreement — Assignment of Accounts Receivable is a legally binding contract between a business (referred to as the "Client") and a financial institution (referred to as the "Factor"). This agreement facilitates the process of factoring, where the Factor purchases the Client's accounts receivable at a discount in exchange for immediate cash flow. The Utah General Form of Factoring Agreement outlines the terms and conditions under which the Client assigns their rights to collect payments from their customers to the Factor. The agreement typically includes the following key elements: 1. Parties involved: Identifies the names and addresses of the Client and the Factor. 2. Assignment of accounts receivable: The Client assigns all accounts receivable, including the associated rights, title, and interest, to the Factor. This allows the Factor to collect payments directly from the Client's customers. 3. Purchase price: Specifies the discount rate or the percentage of the total accounts receivable that the Factor agrees to purchase from the Client. The purchase price is typically a percentage of the face value of the invoices, minus any fees or charges. 4. Repurchase obligations: Outlines the Client's responsibility to repurchase any uncollectible accounts receivable or invoices that the Factor cannot collect due to customer defaults or disputes. 5. Payment terms: Specifies how and when the Factor will remit payment to the Client for the purchased accounts receivable. This may include details such as the frequency of payments and any applicable fees. 6. Notification requirements: States the Client's obligation to notify the Factor of any changes in the business's ownership, contact information, or financial status. 7. Termination provisions: Describes the circumstances under which either party can terminate the agreement, including notice requirements and any penalties associated with early termination. Different types of Utah General Form of Factoring Agreement — Assignment of Accounts Receivable may exist based on the specific needs and preferences of the Client and the Factor. These variations may include: 1. Recourse factoring agreement: The Client retains the ultimate responsibility for any uncollected invoices, even after the sale to the Factor. If any accounts become uncollectible, the Factor can demand that the Client repurchase them. 2. Non-recourse factoring agreement: The Factor assumes the risk of non-payment by the Client's customers. If any invoices become uncollectible due to customer defaults, the Factor absorbs the loss instead of demanding repayment from the Client. 3. With notice factoring agreement: Requires the Client to provide advance notice to the customers before assigning their accounts receivable to the Factor. This minimizes any confusion or disputes between the customers and the Factor. It is essential for both the Client and the Factor to carefully review and understand the terms specified in the Utah General Form of Factoring Agreement — Assignment of Accounts Receivable before entering into the agreement. Seeking legal counsel is advisable to ensure compliance with Utah state laws and to address any specific requirements or provisions desired by either party.