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The Late Payment Agreement is essential in UAE commercial practice where businesses need to formalize arrangements for settling overdue payments while ensuring compliance with local laws and Sharia principles. This document is typically used when a debtor has defaulted on original payment terms but both parties wish to maintain their business relationship through a structured settlement plan. The agreement must carefully navigate UAE legal requirements, particularly regarding interest and late payment charges, while providing adequate protection for the creditor's rights. It includes specific provisions for payment scheduling, default consequences, and enforcement mechanisms, all structured to be enforceable under UAE law and acceptable to local courts. The document is particularly relevant in the current business climate where cash flow management and debt recovery have become increasingly important.

1. Parties: Identification of the creditor and debtor, including full legal names, addresses, and registration details if companies

2. Background: Brief history of the original debt, reference to original agreement, current outstanding amount, and reason for this late payment arrangement

3. Definitions: Key terms used in the agreement including 'Outstanding Amount', 'Due Date', 'Payment Schedule', 'Default Event'

4. Acknowledgment of Debt: Formal acknowledgment of the outstanding amount and debtor's obligation to pay

5. Payment Terms: Detailed payment schedule, including installment amounts, payment dates, and payment methods

6. Late Payment Charges: Sharia-compliant compensation for delayed payments, structured as administrative fees rather than interest

7. Default Provisions: Consequences of missing payments, including acceleration of outstanding amounts

8. Representations and Warranties: Debtor's confirmation of ability to pay and truthfulness of financial information provided

9. Governing Law and Jurisdiction: Specification of UAE law as governing law and UAE courts' jurisdiction