CHAPTER 1Payment Terms
Payment terms define the number of days used to calculate when seller gets paid. Buyer and seller can agree to one of the following terms: (1) no payment terms, implying that payment is made at contract completion; (2) payment will begin from a particular start date; or (3) payment will commence when an event happens, e.g., when buyer receives the product accompanied by a valid invoice.
In scenario (3), the contract may read that buyer has Net 30 days to pay seller after receipt of product. Net 30 days means that buyer has 30 days to make payment without penalty. Payment anytime after 30 days may be subject to monetary penalties depending on the contract’s terms and conditions. When credit is a concern, other payment terms ...
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