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The Agreement To Pay Letter is a crucial document in Canadian business and financial transactions, used when there's a need to formally document and structure debt repayment obligations. This document is particularly valuable when parties want to establish clear payment terms for an existing debt or convert an informal payment arrangement into a formal, legally binding commitment. The letter combines elements of both a formal acknowledgment of debt and a payment agreement, making it suitable for various scenarios including business-to-business transactions, consumer debt arrangements, and settlement of outstanding accounts. The document must comply with Canadian federal legislation such as the Interest Act and provincial consumer protection laws, while also adhering to common law principles regarding contract formation. It's commonly used in situations where there's a need to memorialize payment terms, establish a clear repayment schedule, or create a legally enforceable record of a debt obligation.

1. Letterhead and Date: Formal business letterhead of the creditor and current date

2. Recipient Details: Full name and address of the debtor

3. Salutation: Formal greeting to the debtor

4. Debt Acknowledgment: Clear statement of the total amount owed and its origin

5. Payment Terms: Specific details about how and when payments will be made

6. Interest Rate: Statement of any applicable interest rates, ensuring compliance with the Interest Act

7. Consequences of Default: Clear explanation of what happens if payments are missed

8. Contact Information: Details for payment submission and communication

9. Signature Blocks: Space for both parties to sign and date the letter