Collections Agreement Template

COLLECTIONS AGREEMENT

This Collections Agreement (the "Agreement") is made as of the day of , , by and between Client Name: , a Corporation LLC Individual (the "Client"), and Collector Name: , a Corporation LLC Individual (the "Collector").

RECITALS

WHEREAS, the Client maintains certain delinquent accounts, invoices, or receivables described in this Agreement and desires to engage the Collector to perform collection services with respect to such accounts; and

WHEREAS, the Collector is duly authorized and experienced in the collection of delinquent accounts and represents that it will perform collection services in accordance with applicable law and with reasonable skill and care; and

WHEREAS, the parties desire to set forth in writing the terms and conditions under which the Collector will perform collection services for the Client.

NOW, THEREFORE

In consideration of the mutual covenants contained herein, the parties agree as follows:

1. DEFINITIONS

1.1 "Accounts" means the accounts receivable, invoices, or claims identified by the Client and accepted by the Collector for collection, described in the Account Schedule or as otherwise designated in writing by the Client.

1.2 "Net Collections" means amounts actually collected and remitted to the Client by the Collector, less allowable charges, refunds, and credits, but excluding amounts retained by the Collector as collection fees under Section 4.

2. APPOINTMENT; SCOPE OF SERVICES

2.1 Appointment. The Client hereby appoints the Collector as its non-exclusive/exclusive (select by checking one) representative to collect the Accounts described in the Account Schedule and any additional accounts accepted in writing by the Collector. Non-Exclusive Exclusive

2.2 Services. Collector shall use commercially reasonable efforts to locate debtors, demand payment, process payments, reconcile accounts, and, if authorized by this Agreement, initiate litigation or litigation support with respect to Accounts. All services shall be performed in a manner consistent with applicable law and industry standards.

3. AUTHORITY OF COLLECTOR

3.1 Scope of Authority. The Client grants Collector the authority to contact debtors, obtain credit information, accept payments, enter into settlement agreements on behalf of the Client up to the maximum settlement percentage set forth below, and to endorse and deposit checks received in satisfaction of Accounts.

Maximum settlement authority without prior Client consent: %    Collector authorized to commence litigation on behalf of Client: Yes No

4. FEES AND PAYMENT

4.1 Collection Fee. As compensation for services, the Collector shall retain a contingency fee equal to % of Net Collections unless otherwise agreed in writing for specified Accounts. For accounts placed beyond days delinquency, the fee shall be %.

4.2 Remittance. Collector shall remit Net Collections to Client on a basis, accompanied by a statement identifying Accounts, amounts collected, fees retained, and itemized expenses.

5. EXPENSES

5.1 Authorized Expenses. Client shall reimburse Collector for reasonable out-of-pocket expenses actually incurred in connection with collection activities (e.g., skip-tracing, legal filing fees, service of process). Collector shall obtain Client's prior written approval for any single expense in excess of .

5.2 Payment of Expenses. Expenses shall be reimbursed from collected funds prior to remittance to Client, unless otherwise agreed in writing.

6. CLIENT OBLIGATIONS

6.1 Account Information. Client shall timely provide accurate account documentation, including the account holder's name, last known address, account history, original agreement, and any notes relevant to the Account. Accounts to be placed under this Agreement are described as follows:

6.2 Warranty. Client warrants that it is the lawful owner of the Accounts or otherwise has full authority to assign collection rights and that the Accounts are valid and not barred by statute or subject to pending litigation likely to impair collection efforts.

7. REPORTING AND RECORDS

7.1 Reporting. Collector shall provide Client with detailed reports for each remittance period identifying each Account, payments received, fees and expenses deducted, settlements entered into, and remaining balances.

7.2 Account Records. Collector shall maintain contemporaneous records of collection activities and make such records available to Client upon reasonable request for a period of .

8. CONFIDENTIALITY

8.1 Confidential Information. Except as required by law, each party shall keep confidential all non-public account information and shall not disclose such information to third parties except as reasonably necessary to perform under this Agreement and subject to applicable law.

9. COMPLIANCE WITH LAW

9.1 Legal Compliance. Collector shall at all times comply with all applicable federal, state and local statutes, regulations, and rules governing debt collection, including consumer protection laws where applicable. Collector shall not engage in unfair, deceptive, or abusive practices.

10. INDEMNIFICATION

10.1 Collector Indemnity. Collector shall indemnify, defend and hold Client harmless from and against any claims, damages, liabilities, costs and expenses (including reasonable attorneys' fees) arising from Collector's gross negligence, willful misconduct, or material breach of this Agreement.

10.2 Client Indemnity. Client shall indemnify, defend and hold Collector harmless from and against any claims, damages, liabilities, costs and expenses arising from the inaccuracy of Client-provided account information, the failure to disclose material facts affecting collectability, or any breach of Client's warranties in this Agreement.

11. LIMITATION OF LIABILITY

Except for liability arising from gross negligence or willful misconduct, neither party shall be liable to the other for consequential, incidental, punitive or exemplary damages, and each party's aggregate liability to the other under this Agreement shall be limited to amounts actually paid or payable under this Agreement during the preceding twelve (12) months.

12. TERM AND TERMINATION

12.1 Term. This Agreement shall commence on the Effective Date and continue until terminated by either party upon days' prior written notice.

12.2 Effect of Termination. Upon termination, Collector shall cease collection activities unless otherwise instructed in writing and shall promptly remit Net Collections and return or destroy confidential Client information as directed. Outstanding fees and authorized expenses incurred prior to termination shall survive and be payable in accordance with this Agreement.

13. NOTICES

All notices under this Agreement shall be in writing and delivered personally, by certified mail (return receipt requested), or by overnight courier to the addresses below or to such other address as either party may designate by notice.

14. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of , without regard to its conflicts of law principles.

15. ENTIRE AGREEMENT

This Agreement, including any schedules and attachments, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings and negotiations, whether written or oral.

16. SEVERABILITY

If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect and the invalid or unenforceable provision shall be replaced by a valid provision that most closely approximates the parties' intent.

17. AMENDMENTS; WAIVER; COUNTERPARTS

No amendment or waiver of any provision of this Agreement shall be effective unless in writing and signed by both parties. The failure to enforce any provision shall not constitute a waiver of that provision. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

18. MISCELLANEOUS

18.1 Assignment. Neither party may assign this Agreement or any rights hereunder without the prior written consent of the other party, except that Collector may assign its rights to a successor entity in connection with a merger or sale of substantially all of its assets.

SIGNATURES

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