This is a legal document, relating to terms of purchase.
By issuing this letter, you are committing to the contents of the letter.
It sometimes happens that you choose to alter terms of payment for your services or products. A client may have difficulty paying on time, or be unable to meet their obligations. To make things easier, you decide to vary the terms of purchase.
This can involve changes to amounts of payment, periods of payment, and dealing with arrears in payments, and combinations of these things.
The situation prior to altering your terms is that the client is obligated to you under the original terms of sale.
You can make stipulations regarding the change in payments.
As long as these terms are reasonable, (meaning not onerous or too difficult for compliance), you can include terms if the new payments are not received.
You must clearly define the terms and amounts of the new payments in your letter.
It is appropriate to make a formal proposal of the alteration of terms of payment, prior to any changes.
Notification of terms of the alterations to payments is useful in allowing the client to calculate repayments in relation to other obligations they may have.
The example below is of alterations to a schedule of payments by a wholesaler whose client has received a shipment, and wants the materials, but whose cashflow is currently very low.
Please note regarding this example:
Re: Changes to terms of payment for goods received
I refer to our telephone conversation of (date) in which an alteration of terms of payments for goods received was requested.
Under the circumstances as you explained, we do understand your concerns, and appreciate your bringing this matter to our attention.
Accordingly, we propose the following alterations to outstanding payments:
The goods specifically covered by this revised schedule of payments are:
Total due: $12340.00
Current repayments under terms of sale: $800 per month
Proposed revised repayments: $250 per month
Default provisions of revised payments
It will be agreed that in the event of default on the revised payments, the following conditions shall apply:
If these conditions are acceptable, please advise accordingly in writing.
A formal agreement will be drafted by our solicitors on this basis upon receipt of your advice.
Please contact me if you wish to discuss these matters further.