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Bernstein Burkley
  • Practice Areas
    • Overview
    • Bankruptcy & Restructuring
    • Business and Corporate Transactions
    • Creditors’ Rights
    • Litigation
    • Oil & Gas and Energy
    • Real Estate
  • Our Attorneys
  • About Us
    • Our Approach
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    • Professional Memberships
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    • Bernstein’s Dictionary of Bankruptcy Terminology
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Q&A
Q&A

How can I protect my rights against a defaulting credit customer?

Posted on October 29, 2012 by Bob Bernstein

Q: What are some suggested provisions for the terms I should be including in my credit agreement in order to protect my rights against a defaulting credit customer?

A: A credit agreement provides the terms and conditions of a credit relationship and sets the ground rules for any future conflicts. These legal provisions are among those I recommend for B2B transactions.

  • Payment Terms – Here are the due dates, rates, discounts, late fees, percentages and payment options – the heart of a good, working credit relationship
  • Interest – When are late fees assessed? At what percentage rate? Unless creditors obtain a signature on an agreement they may not be able to legally collect one.
  • Waiver of Jury Trial – Credit criminals find wiggle room in asking for a costly jury trial. This provision waives the jury trial in the honeymoon phase of a relationship.
  • Choice of Law Provision – Sellers – or their attorneys- usually understand the laws in their state (or know which states are favorable) and want them to apply in any dispute.
  • Jurisdiction – This provision, also known as forum selection, partners with “choice of law.” Usually a creditor wants disputes resolved close to home -their home, not the debtor’s

Learn more about credit policies with Bob Bernstein’s book, Get P.A.I.D.TM A Guide to Getting Paid Faster (and What to Do if You Don’t!) at www.getpaidsystem.com

 

 

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