Disbursements clause: Copy, customize, and use instantly
Introduction
A disbursements clause outlines how expenses paid on behalf of a party—such as third-party fees, filing costs, or administrative charges—will be handled under the agreement. It clarifies whether and how these out-of-pocket costs will be reimbursed, billed, or included in overall fees.
Below are templates for disbursements clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Disbursements clause with reimbursement requirement
This version requires the client to cover all out-of-pocket costs.
The client shall reimburse the provider for all reasonable disbursements incurred in the course of delivering services, including but not limited to travel expenses, filing fees, courier charges, and third-party service costs.
Disbursements clause with prior approval condition
This version requires pre-authorization for expenses.
Disbursements exceeding [$X] shall not be incurred without the prior written consent of the client. Approved disbursements will be itemized and invoiced monthly.
Disbursements clause with inclusive pricing
This version rolls disbursements into the service fee.
All anticipated disbursements related to the services under this agreement are included in the total fees quoted and shall not be separately invoiced unless mutually agreed in writing.
Disbursements clause with itemized invoicing
This version mandates detailed breakdowns.
The provider shall include a detailed list of disbursements on each invoice, showing the date, type of expense, amount, and reason for each charge.
Disbursements clause with capped reimbursements
This version sets a maximum.
Total disbursements eligible for reimbursement under this agreement shall not exceed [$X] without a written amendment to this agreement.
Disbursements clause with pass-through cost handling
This version treats expenses as direct costs.
All disbursements shall be treated as pass-through costs, with the provider acting as agent in incurring them and the client bearing the full cost without markup.
Disbursements clause with flat-rate expense handling
This version simplifies billing.
Instead of actual disbursement billing, the client agrees to pay a flat administrative expense fee of [$X] per month to cover all incidental costs incurred by the provider.
Disbursements clause with currency conversion provision
This version applies to international payments.
Disbursements paid in foreign currency shall be reimbursed based on the exchange rate published by [Bank/Platform] on the date of payment, unless otherwise specified.
Disbursements clause with non-reimbursable list
This version defines excluded expenses.
The following categories of disbursements shall not be reimbursed by the client: meals, local commuting, office supplies, and routine overhead costs.
Disbursements clause with end-of-term reconciliation
This version settles expenses at contract close.
Any outstanding or disputed disbursements shall be reconciled and settled within thirty (30) days of contract termination or expiration.
Disbursements clause with monthly reporting requirement
This version includes a fixed reporting cadence.
The provider shall furnish a monthly report detailing all disbursements incurred, with accompanying receipts or documentation upon request.
Disbursements clause with approval threshold tiering
This version adds levels of pre-approval.
Disbursements under $100 require no approval; those between $100 and $500 require email approval; those over $500 require signed written authorization by the client.
Disbursements clause with third-party invoice forwarding
This version involves direct visibility.
Copies of third-party invoices related to disbursements shall be forwarded to the client upon request for verification before reimbursement is processed.
Disbursements clause with advance reimbursement
This version allows up-front payment.
The provider may request an advance reimbursement of anticipated disbursements upon providing a reasonable cost estimate and justification.
Disbursements clause with maximum frequency restriction
This version limits how often disbursements can be charged.
Disbursement charges shall not be submitted more than once per billing cycle, unless they exceed $1,000 in aggregate during a single project milestone.
Disbursements clause with travel reimbursement cap
This version sets a ceiling on travel-related expenses.
Reimbursable travel disbursements shall not exceed $[X] per trip and must align with the client’s travel expense policy.
Disbursements clause with payment timing alignment
This version links to invoice due dates.
Reimbursable disbursements shall be invoiced along with service fees and paid according to the standard net [30]-day invoice terms.
Disbursements clause with client booking preference
This version gives the client booking control.
Where practical, the client may elect to book third-party services directly to avoid reimbursement delays.
Disbursements clause with currency fluctuation adjustment
This version handles exchange rate variance.
If disbursements are paid in a currency different from the contract currency, the reimbursed amount shall reflect the actual cost plus or minus a [2]% fluctuation buffer.
Disbursements clause with audit rights
This version enables cost inspection.
The client reserves the right to audit disbursement records, including receipts and payment confirmations, for up to 12 months after each invoice is issued.
Disbursements clause with bulk disbursement billing
This version consolidates small items.
Minor disbursements under $25 shall be grouped and invoiced in a single line item with general categorization (e.g., “Postage and courier costs – April 2025”).
Disbursements clause with disbursement reserve fund
This version uses a prepaid balance.
The client shall provide a disbursement reserve of $[X], from which eligible out-of-pocket costs may be drawn and reconciled quarterly.
Disbursements clause with non-refundable categorization
This version limits liability.
All disbursements incurred under client direction are non-refundable, even if the related services or engagements are later canceled.
Disbursements clause with tax exclusion
This version separates taxes.
Taxes on disbursements (e.g., VAT, GST) shall be separately itemized and reimbursed in addition to the base disbursement amount.
Disbursements clause with expense type clarification
This version distinguishes between direct and indirect costs.
Only direct third-party costs incurred for client-specific work are eligible for reimbursement. Indirect costs (e.g., general office expenses) are not reimbursable.
Disbursements clause with markup prohibition
This version blocks added fees.
The provider may not apply any markup or administrative fee to disbursement amounts and must invoice them at actual cost.
Disbursements clause with disbursement timing alignment
This version syncs with milestones.
Disbursements shall be invoiced in conjunction with project milestones to provide visibility and manage cash flow predictability.
Disbursements clause with emergency exception
This version allows retroactive approval.
In the event of an emergency requiring immediate disbursement to protect client interests, the provider may proceed without prior approval but must notify the client within 24 hours.
Disbursements clause with project-specific caps
This version varies by assignment.
Each project or workstream under this agreement shall have its own disbursement cap as detailed in the applicable statement of work.
Disbursements clause with hard-copy record requirement
This version adds documentation requirements.
All reimbursable disbursements over $50 must be supported by a hard-copy or digital scan of the original receipt or proof of payment.
Disbursements clause with exclusion for internal services
This version limits reimbursable items.
The client shall not reimburse the provider for internal staff time, technology platform fees, or subscriptions used in the normal course of business.
Disbursements clause with notification of disbursement use
This version requires notification before spending.
The provider shall notify the client in writing before making any disbursement exceeding $250 and await acknowledgment before proceeding.
Disbursements clause with disbursement dispute resolution
This version manages disagreements.
If a disbursement reimbursement is disputed, both parties agree to meet within 10 business days to discuss and attempt good-faith resolution.
Disbursements clause with recurring disbursement tracking
This version applies to ongoing third-party fees.
Recurring disbursements, such as monthly licensing or filing fees, shall be logged in a disbursement tracker accessible to both parties.
Disbursements clause with one-time onboarding credit
This version offers offsetting value.
The provider will credit the client $[X] against future disbursements incurred during onboarding activities as a one-time incentive.
Disbursements clause with task-based allocation
This version links costs to specific deliverables.
Each disbursement shall be linked to the specific task, deliverable, or milestone it supports, as documented in the project log.
Disbursements clause with digital expense log
This version provides cloud-based transparency.
All disbursement records shall be maintained in a shared, read-only cloud ledger for ongoing transparency and tracking.
Disbursements clause with end-of-year summary
This version enables annual review.
The provider shall prepare an annual summary of disbursements by category for the client’s internal accounting and review purposes.
Disbursements clause with non-duplication guarantee
This version ensures costs aren’t double-billed.
The provider warrants that no disbursement charged under this agreement is duplicated across other clients, projects, or accounts.
Disbursements clause with prepayment reconciliation
This version accounts for upfront fees.
Any disbursement prepayments made by the client shall be reconciled and adjusted against future invoices until the prepayment is fully exhausted.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.