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# Factoring Agreement
**This Factoring Agreement** ("Agreement") is made and entered into as of [Insert Date] by and between:
1. **[Seller's Name]**, a [Corporation/LLC/Sole Proprietorship] organized under the laws of [State/Country], with its principal place of business at [Insert Address] ("Seller").
2. **[Factor's Name]**, a [Corporation/LLC/Sole Proprietorship] organized under the laws of [State/Country], with its principal place of business at [Insert Address] ("Factor").
**RECITALS**
WHEREAS, Seller is engaged in the business of [Describe Seller's Business];
WHEREAS, Seller has accounts receivable arising from the sale of goods or services;
WHEREAS, Factor is engaged in the business of purchasing accounts receivable and providing financing to businesses;
WHEREAS, Seller desires to sell, transfer, and assign accounts receivable to Factor in exchange for payment of a discounted amount, and Factor is willing to purchase said accounts receivable.
**NOW, THEREFORE**, in consideration of the mutual covenants and agreements contained herein, the parties agree as follows:
## 1. Definitions
1.1 **Accounts Receivable**: Any amounts owing to Seller from its customers as specified in Schedule A attached hereto.
1.2 **Purchase Price**: The amount to be paid by Factor to Seller for the Accounts Receivable as detailed in Section 3.
## 2. Sale and Assignment of Accounts Receivable
2.1 Seller hereby sells, assigns, and transfers to Factor all right, title, and interest in and to the Accounts Receivable.
2.2 This assignment shall be effective immediately upon execution of this Agreement and delivered to Factor.
## 3. Payment Terms
3.1 Factor agrees to pay Seller the Purchase Price, as determined by the discount rate applied to the face amount of the Accounts Receivable.
3.2 Payment will be made within [Insert Number of Days] business days following the execution of this Agreement and upon successful verification of the Accounts Receivable.
## 4. Representations and Warranties
4.1 **By Seller**: Seller represents and warrants that:
- 4.1.1 Seller is the lawful owner of all Accounts Receivable.
- 4.1.2 All Accounts Receivable are valid and enforceable obligations of the respective customers.
- 4.1.3 No customer has claimed any offset, counterclaim, or defense against the Accounts Receivable.
4.2 **By Factor**: Factor represents and warrants that it has the authority to enter into this Agreement and is qualified to perform the services described herein.
## 5. Indemnification
5.1 Each party agrees to indemnify and hold harmless the other party from any losses, damages, or expenses arising from a breach of this Agreement or failure to perform its duties hereunder.
## 6. Confidentiality
6.1 Both parties agree to keep this Agreement and its terms confidential and will not disclose any information pertaining to the transaction without the prior written consent of the other party.
## 7. Governing Law
7.1 This Agreement shall be governed by and construed in accordance with the laws of the State of [Insert State].
## 8. Entire Agreement
8.1 This Agreement constitutes the entire agreement between the parties and may not be modified except in writing signed by both parties.
IN WITNESS WHEREOF, the parties hereto have executed this Factoring Agreement as of the day and year first above written.
---
**[Seller's Name]**
By: ___________________________
Name: [Insert Name]
Title: [Insert Title]
Date: [Insert Date]
---
**[Factor's Name]**
By: ___________________________
Name: [Insert Name]
Title: [Insert Title]
Date: [Insert Date]
---
**Schedule A**: [Insert detailed list of Accounts Receivable being assigned]
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This template outlines the key components of a factoring agreement, including definitions, sale terms, payment details, representations, warranties, indemnification clauses, and other legal standards necessary for such a contract. Always consult with a legal professional before using any contract template.