Failure to make payments clause: Copy, customize, and use instantly
Introduction
A failure to make payments clause sets out the consequences and remedies available when one party fails to meet their payment obligations under the contract. This clause is critical for protecting the interests of the payee and ensuring accountability while minimizing potential disputes.
Below are templates for failure to make payments clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Standard failure to make payments clause
This variation outlines basic remedies for non-payment.
If the Paying Party fails to make any payment by the due date specified in this Agreement, the Receiving Party reserves the right to charge interest on the overdue amount at a rate of [percentage]% per month until full payment is made. Additionally, the Receiving Party may suspend performance of its obligations under this Agreement until payment is received.
Failure to make payments with cure period clause
This variation allows a grace period for overdue payments.
In the event of a failure to make any payment by the due date, the Paying Party shall have a cure period of [number] days to rectify the non-payment. If payment is not made within this period, the Receiving Party may terminate this Agreement and seek damages.
Failure to make payments with late fees clause
This variation imposes late fees for overdue payments.
If the Paying Party fails to make any payment on the due date, they shall incur a late fee of [amount or percentage] per [period, e.g., week] of delay, in addition to the overdue payment. Late fees will continue to accrue until full payment is made.
Failure to make payments with termination rights clause
This variation permits termination for repeated non-payment.
Repeated failures by the Paying Party to make payments when due, defined as more than [number] instances within a [timeframe], shall constitute a material breach of this Agreement. The Receiving Party may terminate this Agreement with immediate effect and pursue all available remedies.
Failure to make payments with acceleration clause
This variation accelerates all future payments in case of default.
If the Paying Party fails to make any payment by the due date, the Receiving Party may declare all remaining payments under this Agreement immediately due and payable. The Paying Party shall also be responsible for any costs incurred in enforcing this provision.
Failure to make payments with suspension of services clause
This variation allows for temporary suspension of services.
In the event of non-payment, the Receiving Party reserves the right to suspend all services or deliveries under this Agreement until full payment of the overdue amount, including any applicable interest or fees, is received.
Failure to make payments with dispute resolution clause
This variation includes a process for resolving payment disputes.
If the Paying Party disputes any portion of an invoice, they must notify the Receiving Party in writing within [number] days of receipt. Failure to make timely payment of the undisputed portion will result in interest charges at [percentage]% per month and may trigger termination of this Agreement.
Failure to make payments with collateral recovery clause
This variation permits recovery of collateral in case of non-payment.
If the Paying Party fails to make payment within [number] days of the due date, the Receiving Party may repossess any collateral provided under this Agreement, in addition to pursuing other legal remedies.
Failure to make payments with legal fees reimbursement clause
This variation holds the Paying Party liable for legal fees.
In the event of non-payment, the Paying Party agrees to reimburse the Receiving Party for all reasonable legal fees and costs incurred in the collection of overdue payments, in addition to the principal amount and any accrued interest.
Failure to make payments with payment plan clause
This variation allows for a payment plan to resolve overdue amounts.
If the Paying Party is unable to pay the full amount due, they may propose a payment plan within [number] days of the due date, subject to the Receiving Party's approval. Failure to adhere to the agreed payment plan will result in immediate enforcement of all remedies under this Agreement.
Failure to make payments with interest compounding clause
This variation includes compounding interest on overdue amounts.
For any payment not received by the due date, the Paying Party agrees to pay interest on the overdue amount at a rate of [percentage]% per [timeframe, e.g., month], compounded monthly, until full payment is made.
Failure to make payments with credit reporting clause
This variation includes a provision for reporting non-payment.
If payment is not received within [number] days of the due date, the Receiving Party may report the non-payment to relevant credit reporting agencies, in addition to pursuing other remedies under this Agreement.
Failure to make payments with specific performance clause
This variation enforces compliance through specific performance.
In the event of non-payment, the Receiving Party may seek an order of specific performance requiring the Paying Party to fulfill their payment obligations under this Agreement, in addition to seeking damages.
Failure to make payments with refund forfeiture clause
This variation denies refunds for prior payments in cases of default.
Failure by the Paying Party to make any payment due under this Agreement will result in forfeiture of any deposits or prepayments made, which shall be retained by the Receiving Party as partial compensation for the breach.
Failure to make payments with indemnification clause
This variation requires the Paying Party to indemnify the Receiving Party for losses caused by non-payment.
If the Paying Party fails to make any payment by the due date, they shall indemnify and hold harmless the Receiving Party against any losses, damages, or costs incurred as a result of the non-payment, including legal and collection fees.
Failure to make payments with escrow requirement clause
This variation allows funds to be placed in escrow in case of disputes.
In the event of a payment dispute, the Paying Party agrees to deposit the disputed amount into an escrow account within [number] days. Failure to comply may result in the immediate suspension of services and additional penalties.
Failure to make payments with third-party collection clause
This variation permits involvement of a third-party collection agency.
If payment is not received within [number] days of the due date, the Receiving Party may assign the outstanding amount to a third-party collection agency. The Paying Party shall be responsible for any additional fees incurred in the collection process.
Failure to make payments with currency adjustment clause
This variation accounts for currency fluctuations on overdue payments.
For any overdue payment, the Paying Party shall be liable for adjustments due to currency fluctuations between the due date and the payment date, in addition to interest and late fees specified in this Agreement.
Failure to make payments with lien rights clause
This variation allows the Receiving Party to place a lien on assets.
If the Paying Party fails to make any payment within [number] days of the due date, the Receiving Party reserves the right to place a lien on the Paying Party’s assets, as permitted by law, until the outstanding amount is settled in full.
Failure to make payments with termination of discounts clause
This variation removes any discounts or incentives for late payers.
Failure to make timely payment will result in the immediate termination of any discounts, incentives, or preferential terms previously granted under this Agreement. The Paying Party shall be liable for the full amount without any reductions.
Failure to make payments with payment security clause
This variation requires additional security for future payments.
In the event of non-payment, the Paying Party agrees to provide additional security in the form of a guarantor or collateral to ensure future payments are made as per the Agreement terms.
Failure to make payments with recurring invoice suspension clause
This variation suspends future invoicing for non-payment.
If payment for any invoice is not received within [number] days, the Receiving Party may suspend all future invoicing and deliveries under this Agreement until the overdue amount is paid in full.
Failure to make payments with automatic renewal termination clause
This variation ends auto-renewal in cases of non-payment.
Failure to make any payment within [number] days of the due date will result in the termination of the automatic renewal provisions of this Agreement, with all outstanding amounts remaining due and payable.
Failure to make payments with prior notice requirement clause
This variation requires prior notice before enforcement actions.
Before taking any enforcement action due to non-payment, the Receiving Party shall provide written notice to the Paying Party, giving them [number] days to cure the non-payment. Failure to comply within this period will result in immediate application of remedies.
Failure to make payments with goodwill reduction clause
This variation impacts the Paying Party’s future relationship terms.
In the event of non-payment, the Receiving Party reserves the right to reevaluate the Paying Party's eligibility for future contracts, discounts, or preferential terms, with the overdue amount subject to collection as outlined in this Agreement.
Failure to make payments with advance payments adjustment clause
This variation allows adjustment of advance payments for future services.
Failure to make payment by the due date will result in the adjustment or forfeiture of any advance payments previously made by the Paying Party, which will be applied toward the overdue balance.
Failure to make payments with invoice consolidation clause
This variation consolidates overdue payments into a single invoice.
If multiple payments are overdue, the Receiving Party may consolidate the outstanding amounts into a single invoice, payable within [number] days, with interest accruing on the consolidated total.
Failure to make payments with delivery hold clause
This variation suspends delivery of goods or services.
Failure to make payment by the due date will result in the immediate suspension of any pending deliveries under this Agreement until the overdue balance, including interest, is paid in full.
Failure to make payments with credit limit reduction clause
This variation reduces the Paying Party’s credit limit.
In the event of non-payment, the Paying Party’s credit limit will be reduced to [amount], and all future transactions will require payment in advance until the overdue balance is cleared.
Failure to make payments with step-in rights clause
This variation allows the Receiving Party to take over certain operations.
If payment is not received within [number] days of the due date, the Receiving Party may exercise step-in rights to manage specific operations or resources until the outstanding balance is resolved.
Failure to make payments with deferred penalty clause
This variation applies penalties only after an extended grace period.
Failure to make payment within [number] days of the due date will result in the application of deferred penalties, including [specific penalties, e.g., increased interest rates], which will be enforced after [number] days.
Failure to make payments with non-renewal of agreement clause
This variation prevents renewal of the agreement in case of non-payment.
If any payment remains overdue beyond [number] days, the Receiving Party reserves the right not to renew this Agreement upon its expiration, with all outstanding amounts still enforceable.
Failure to make payments with partial delivery clause
This variation permits partial fulfillment of obligations.
In the event of non-payment, the Receiving Party may limit its obligations under this Agreement to partial delivery of goods or services, proportional to the payments received.
Failure to make payments with cost escalation clause
This variation increases future costs due to non-payment.
Failure to make timely payment will result in an escalation of future service or product costs by [percentage] until the overdue amount is fully settled.
Failure to make payments with loyalty program exclusion clause
This variation removes the Paying Party from loyalty programs.
Failure to make payment within [number] days of the due date will result in the Paying Party’s immediate exclusion from any loyalty or rewards programs, and accrued benefits will be forfeited until the overdue balance is resolved.
Failure to make payments with contract renegotiation clause
This variation allows renegotiation of terms due to non-payment.
If payment is not received within [number] days, the Receiving Party reserves the right to renegotiate the terms of this Agreement, including pricing and delivery schedules, to account for the non-payment.
Failure to make payments with asset seizure clause
This variation permits the seizure of secured assets.
In the event of non-payment beyond [number] days, the Receiving Party may seize secured assets identified in Section [number] as collateral for the outstanding balance, in accordance with applicable laws.
Failure to make payments with credit review clause
This variation subjects the Paying Party to a creditworthiness review.
Failure to make payment within [number] days will trigger a review of the Paying Party’s creditworthiness, and the Receiving Party reserves the right to revise credit terms or require advance payments for future transactions.
Failure to make payments with administrative fee clause
This variation imposes additional administrative charges.
Non-payment within [number] days will incur an administrative fee of [amount] to cover additional processing and collection efforts, in addition to interest and late fees.
Failure to make payments with public disclosure clause
This variation permits disclosure of non-payment.
The Receiving Party reserves the right to disclose the Paying Party’s failure to meet payment obligations to relevant industry groups or associations after [number] days of non-payment, subject to applicable privacy laws.
Failure to make payments with partial services clause
This variation limits the services provided due to non-payment.
In the event of non-payment, the Receiving Party may reduce its service obligations under this Agreement to reflect the proportion of payments received, with full services resuming upon settlement of the overdue balance.
Failure to make payments with incentive clawback clause
This variation allows clawback of previously granted incentives.
If payment is not received within [number] days, the Receiving Party reserves the right to claw back any incentives or discounts previously applied to the Paying Party’s account.
Failure to make payments with dispute waiver clause
This variation waives disputes related to non-payment.
Failure to make payment within [number] days constitutes a waiver by the Paying Party of any disputes related to the overdue invoice, and the Receiving Party may enforce payment in full without further negotiation.
Failure to make payments with termination of warranties clause
This variation voids warranties due to non-payment.
Non-payment beyond [number] days will result in the termination of all warranties associated with the goods or services provided under this Agreement, with no further obligations by the Receiving Party.
Failure to make payments with interest on attorney fees clause
This variation includes attorney fees as part of the overdue amount.
If payment is not made within [number] days, the Paying Party agrees to pay all reasonable attorney fees and collection costs incurred by the Receiving Party to recover the overdue amount, in addition to the original principal and interest.
Failure to make payments with escalation to senior management clause
This variation escalates the issue to senior management.
Failure to make payment within [number] days will result in the issue being escalated to the Paying Party’s senior management for resolution. The Receiving Party may also involve legal counsel if payment is not made within [number] additional days.
Failure to make payments with suspension of future credit clause
This variation suspends future credit until payment is made.
If payment is not received within [number] days, the Paying Party’s credit with the Receiving Party will be suspended until the overdue balance is paid in full.
Failure to make payments with reinstatement fee clause
This variation requires a fee to reinstate services after non-payment.
If payment is not received by the due date, the Paying Party will be required to pay a reinstatement fee of [amount] before services are resumed, in addition to the overdue balance and any applicable interest.
Failure to make payments with re-payment schedule clause
This variation allows a structured re-payment plan for overdue amounts.
In the event of non-payment, the Paying Party may request a re-payment schedule, subject to the Receiving Party’s approval. This schedule must be agreed upon in writing and is subject to a [percentage]% interest rate on the overdue amount.
Failure to make payments with legal action clause
This variation authorizes legal action for non-payment.
If payment is not received within [number] days of the due date, the Receiving Party reserves the right to initiate legal action to recover the overdue amount, including filing a lawsuit or seeking a court order for payment.
Failure to make payments with suspension of all services clause
This variation suspends all services under the agreement.
Failure to make payment within [number] days will result in the suspension of all services or deliveries under this Agreement until payment is made in full, including interest and late fees.
Failure to make payments with audit rights clause
This variation grants audit rights for overdue payments.
If payment is not made within [number] days, the Receiving Party has the right to audit the Paying Party’s financial records to determine the cause of the non-payment and enforce compliance with the payment terms.
Failure to make payments with automatic account freeze clause
This variation freezes the Paying Party’s account in case of non-payment.
Failure to make payment within [number] days will result in an automatic freeze of the Paying Party’s account, including the suspension of any future orders or transactions, until the overdue amount is fully paid.
Failure to make payments with compensation for delays clause
This variation compensates the Receiving Party for delays caused by non-payment.
If payment is not made within [number] days, the Paying Party will compensate the Receiving Party for any delays caused by the non-payment, including but not limited to loss of business and operational disruptions, as outlined in Section [number].
Failure to make payments with escalation to arbitration clause
This variation triggers arbitration for non-payment disputes.
In the event of non-payment, if the Paying Party does not resolve the overdue amount within [number] days, the Receiving Party may initiate arbitration to settle the dispute, as outlined in the arbitration section of this Agreement.
Failure to make payments with short-term loan clause
This variation offers a loan option to cover overdue payments.
If the Paying Party fails to make payment within [number] days, the Receiving Party may offer a short-term loan to cover the overdue amount, with repayment terms and interest to be mutually agreed upon.
Failure to make payments with early termination penalty clause
This variation applies a penalty for early termination due to non-payment.
Failure to make payment within [number] days will result in an early termination penalty of [amount] or [percentage]% of the remaining balance, in addition to any outstanding overdue amounts.
Failure to make payments with suspension of warranties and support clause
This variation suspends warranties and support services.
If the Paying Party fails to make payment within [number] days, all warranties and support services will be suspended until the overdue balance, including any accrued interest or fees, is settled.
Failure to make payments with credit rating impact clause
This variation impacts the Paying Party’s credit rating.
Failure to make payment within [number] days will result in the Receiving Party reporting the non-payment to credit agencies, which may negatively affect the Paying Party’s credit rating.
Failure to make payments with recovery of costs clause
This variation allows the Receiving Party to recover costs incurred in pursuit of overdue payments.
If payment is not received within [number] days, the Paying Party agrees to reimburse the Receiving Party for any costs incurred in the recovery process, including legal fees, collection fees, and administrative expenses.
Failure to make payments with recurring payment adjustments clause
This variation adjusts future payments due to prior non-payment.
If payment is not made within [number] days, the Receiving Party reserves the right to adjust future payment schedules to reflect the outstanding balance, including adding an additional [percentage]% to future invoices until the overdue amount is cleared.
Failure to make payments with product or service restrictions clause
This variation restricts certain products or services until payment is made.
The Paying Party’s access to certain products or services under this Agreement will be restricted until full payment is made, including any applicable late fees or interest charges for overdue amounts.
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.