Terms and conditions - contracts with credit customers

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Terms and conditions - contracts with credit customers

These are specific terms and conditions that may be included in contracts with credit customers:

  1. Length of credit period

    The credit period is the number of days that a customer is allowed to wait before paying an invoice.

     If the company grants terms of 2/10 net 30, this means the credit period is 10 days if the customer chooses to take a 2% early payment discount, or the credit period is 30 days if the customer chooses to pay the full amount of the invoice.

  2. Amount of interest on late payments

    Usually this type of phrase is included: "Accounts not paid within terms are subject to a ___% monthly finance charge."

    The charge is usually less than 10% interest per year.

  3. Retention of title

    A retention of title clause is a provision in a contract for the sale of goods that the title to the goods remains vested in the seller until certain obligations (usually payment of the purchase price) are fulfilled by the buyer.

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