Can this be signed electronically?

Yes. Electronic signatures are valid under the ESIGN Act (15 U.S.C. §7001) and UETA where adopted, provided the signer shows intent, consents to electronic transactions, the signature is attributable, and the record can be retained and reproduced.

Is notarization required for enforceability?

Not always. Notarization is state-dependent and often required for deeds or certain POAs but not typically for settlement contracts. If remote online notarization (RON) is used, follow state RON rules and retain audio-video record per state law.

What happens if names differ?

Mismatched names can trigger identity verification failures, tax reporting errors, or challenge enforceability. Update legal names to match ID or include a legal name alias clause and attach formation documents or identification to avoid disputes.

How long must I keep the agreement?

Retention depends on document type and regulators. Maintain the agreement for the active term plus at least three years for IRS purposes (IRC §6501(a)), and up to six years for HIPAA-regulated records (45 CFR §164.530(j)).

Does execution trigger tax reporting?

Possibly. Settlements or payment reductions can create taxable income or cancellation of debt events. Consult IRC rules and a tax professional; retain records for at least three years per IRS guidance (IRC §6501(a)).

How can parties revoke or cancel the agreement?

Revocation depends on terms and consideration. If the agreement includes a revocation clause, follow notice, timing, and return-of-consideration procedures. Absent agreement terms, consult state contract law and applicable consumer protections before unilateral cancellation.

Electronic Signature
Templates
Finance
Financial Shake Agreement

Financial Shake Agreement

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

FINANCIAL SHAKE AGREEMENT

Parties and Effective Date

Party A (Payor / Restructuring Party): Party A Address: Party A Contact (Phone / Email): Entity Type (select applicable):

Individual Corporation LLC Partnership Other

Party B (Payee / Restructured Recipient): Party B Address: Party B Contact (Phone / Email): Entity Type (select applicable):

Individual Corporation LLC Partnership Other

Effective Date:

Recitals

WHEREAS, Party A and Party B have financial obligations or receivables that the parties wish to restructure, reallocate, or otherwise adjust by mutual agreement; and

WHEREAS, the parties desire to set forth the terms and conditions by which certain monetary obligations will be modified, paid, or otherwise settled as specified in this Agreement.

Definitions

For purposes of this Agreement, the following terms shall have the meanings set forth below. "Principal Amount" means the aggregate amount of monetary obligations identified in Section Principal Amount. "Maturity Date" means the final date by which all amounts must be paid as set forth in the Repayment Schedule. "Default" has the meaning set forth in Section Event of Default.

Principal Terms

Principal Amount (total restructured obligation): Purpose / Description of Restructuring: Annual Interest Rate (if applicable): Term / Maturity:

Repayment Schedule

The parties agree the Principal Amount and accrued interest shall be paid according to the schedule below. Additional rows may be appended by written amendment signed by both parties.

Installment Description	Due Date	Amount



Subtotal
Interest (if applicable)
Total Amount Due

Payment Mechanics & Default

All payments shall be made in lawful currency to the account or method designated by the Payee. Accepted payment methods: check, wire transfer, ACH, or other method mutually agreed in writing. Late payments will incur a late fee equal to the lesser of $50 or 5% of the overdue amount for each 30-day period past due.

Payment Instructions / Account Details:

Event of Default: If a party fails to make any payment when due, becomes insolvent, files for bankruptcy, or breaches a material representation or covenant, the non-defaulting party may declare all outstanding amounts immediately due and payable and pursue any remedy available at law or in equity, including recovery of costs, interest, and attorneys' fees.

Security, Collateral & Fees

Security / Collateral Description (if any): Fees and Expenses (who bears):

Representations & Covenants

Each party represents and warrants that it has full power and authority to enter into this Agreement and that the execution and performance of this Agreement will not violate any material agreement or applicable law. Each party covenants to comply with applicable laws and to provide any documentation reasonably requested to effectuate the terms of this Agreement.

Confidentiality & Publicity

The parties agree to keep the terms of this Agreement confidential except to the extent disclosure is required by law or necessary to effectuate performance (including to lenders, accountants or legal advisors), in which case the disclosing party shall use reasonable efforts to limit disclosure.

Notices

Notices shall be in writing and delivered to the addresses set forth above or to such other address as a party may designate by notice in accordance with this Section. Delivery by hand, certified mail, or overnight courier shall be effective upon receipt.

Notice Address for Party A: Notice Address for Party B:

Miscellaneous Provisions

Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the state or jurisdiction agreed by the parties below. Assignment: Neither party may assign its rights or obligations under this Agreement without the prior written consent of the other party. Amendment: This Agreement may be amended only by a written instrument signed by both parties. Severability: If any provision is held unenforceable, the remaining provisions shall remain in full force and effect. Entire Agreement: This Agreement constitutes the entire agreement between the parties concerning the subject matter hereof.

Governing Jurisdiction:

Acknowledgment and Authority

Each signatory represents and warrants that the person signing on behalf of a party has full authority to bind that party to the terms of this Agreement and that the facts, representations and commitments contained herein are true and correct to the best of the signing party's knowledge.

Additional Terms / Notes:

Party A Printed Name:

By:

Date:

Party B Printed Name:

By:

Date:

Certification: By signing above, each party certifies that the information provided in this Agreement is true and complete to the best of their knowledge, and that they are authorized to enter into and be bound by the terms set forth herein. The parties acknowledge receipt of a fully executed original or counterpart of this Agreement.

What the Financial Shake Agreement Covers

Financial Shake Agreement is a standardized legal instrument used to restructure or settle monetary obligations between two or more parties. It typically documents revised payment schedules, agreed reductions or increases in principal, release of claims, and mutual covenants that alter prior financial arrangements. The form clarifies responsibilities, timelines, and enforcement mechanisms while recording consideration exchanged. Organizations use this agreement to capture negotiated changes without drafting a full loan or settlement bilateral agreement each time. When executed properly it becomes an enforceable written contract under general contract law and applicable electronic signature statutes.

Step-by-Step: Prepare, Sign, and Record the Agreement

Follow this sequential checklist to prepare, negotiate, sign, and record a Financial Shake Agreement to reduce errors and ensure enforceability.

01

Assemble Documents: Collect original contract, payment history, authorization, and supporting financial records.
02

Draft Amendments: Record new terms clearly, including amounts, dates, and releases.
03

Obtain Approvals: Get internal sign-off and legal review before signature.
04

Execute & Store: Sign by authorized parties, notarize if required, and retain copies.

Frequently Asked Questions About Execution and Enforcement

Answers to common questions about completing, signing, and enforcing a Financial Shake Agreement, including electronic signature and recordkeeping considerations.

Need help? Contact support

Can this be signed electronically?
Yes. Electronic signatures are valid under the ESIGN Act (15 U.S.C. §7001) and UETA where adopted, provided the signer shows intent, consents to electronic transactions, the signature is attributable, and the record can be retained and reproduced.
Is notarization required for enforceability?
Not always. Notarization is state-dependent and often required for deeds or certain POAs but not typically for settlement contracts. If remote online notarization (RON) is used, follow state RON rules and retain audio-video record per state law.
What happens if names differ?
Mismatched names can trigger identity verification failures, tax reporting errors, or challenge enforceability. Update legal names to match ID or include a legal name alias clause and attach formation documents or identification to avoid disputes.
How long must I keep the agreement?
Retention depends on document type and regulators. Maintain the agreement for the active term plus at least three years for IRS purposes (IRC §6501(a)), and up to six years for HIPAA-regulated records (45 CFR §164.530(j)).
Does execution trigger tax reporting?
Possibly. Settlements or payment reductions can create taxable income or cancellation of debt events. Consult IRC rules and a tax professional; retain records for at least three years per IRS guidance (IRC §6501(a)).
How can parties revoke or cancel the agreement?
Revocation depends on terms and consideration. If the agreement includes a revocation clause, follow notice, timing, and return-of-consideration procedures. Absent agreement terms, consult state contract law and applicable consumer protections before unilateral cancellation.

Who Typically Prepares and Signs This Agreement

Typical users complete Financial Shake Agreements to record negotiated payment changes, settlements, or restructuring terms between creditors and debtors.

Real Estate Lenders: Mortgage servicers and private lenders document loan modifications and forbearance agreements with clear payment schedules.
Small Businesses: Businesses restructure supplier or vendor debts, documenting new installments and mutual releases to preserve operations.
Consumers and Borrowers: Individuals negotiate debt settlements, payment plans, or loan term changes with creditors and legal counsel oversight.

Use appropriate legal review and recordkeeping practices, especially when tax or regulatory reporting may be affected by settlement terms.

Essential Data Elements to Include

Agreement Title: Name of the agreement.

Effective Date: Enter date as MM/DD/YYYY.

Parties: Full legal names and addresses.

Payment Terms: Amounts, schedule, and method.

Consideration: Specify cash or noncash value.

Signatures: Name, title, date, and eConsent.

Key Risks and Potential Penalties

Tax Reporting: Possible reporting requirement.

False Statements: Civil or criminal liability.

Enforceability Risk: Ambiguous terms weaken claims.

Identity Failure: Verification delays or denial.

Late Fees: Accrued penalties accrue.

Information Loss: Insufficient retention risks.

Common Preparation Mistakes to Avoid

Using vague payment descriptions such as 'reasonable amount' rather than precise dollar figures creates ambiguity and can lead to disputes during enforcement or collections.
Failing to record a release or settlement clause when accepting less than owed may leave the creditor exposed to future claims or require additional consideration.
Relying on unsigned email confirmations without a clear intent or consent statement can make opposition easy and complicate electronic signature attribution under ESIGN.
Not aligning the agreement's governing law or venue with parties' expectations increases litigation risk and may affect enforceability in state courts.

Core Sections to Include in a Professional Agreement

Key sections of a Financial Shake Agreement define the scope, payment mechanics, releases, representations, default remedies, and signature blocks to ensure legal clarity and operational consistency.

Scope

Describe original obligation, identify which debts are modified, and specify whether the agreement fully replaces prior contracts or acts as a partial modification. Use precise references to dates and document identifiers.

Payment Terms

List exact payment amounts, installment schedule, deadlines, interest calculation method, acceptable payment channels, and consequences of missed payments. Include rounding rules and whether payments are net of taxes.

Release

If a release is exchanged, define scope of claims waived, effective date, any exceptions, and whether the release is mutual or one-way. Attach separate release exhibit if extensive.

Representations

Each party should state authority, solvency representation, and absence of conflicting agreements. Include a warranty about accuracy of provided financial statements and authorization to modify obligations.

Default

Define events of default, cure periods, acceleration rights, and remedies including collection costs and attorney fees. Specify notice procedures and whether notices may be electronic.

Signatures

Provide printed names, titles, dates, and method of signing. If using electronic signatures, include consent language and specify authentication and retention methods to support ESIGN compliance.

How to Configure an Online Signing Workflow

Configure the online workflow to assign fields, set signer order, add authentication, and enable automated notifications for the Financial Shake Agreement.

Field name and configuration options	Configuration options and sample values
Signature field placement per signer role	Assign to designated signer role.
Conditional payment fields and visibility	Show specific fields based on responses.
Signer authentication level and methods	Email or SMS code options available.
Automated notifications, reminders, and escalations	Set reminders for overdue payments and unsigned documents.

Delivery Channels and Technical Requirements

Use these distribution and technical requirements to share the Financial Shake Agreement securely across platforms and integrate with records systems.

File formats: PDF, DOCX, or flat images.
Integrations: Salesforce, NetSuite, Microsoft 365, and cloud storage.
Authentication: Email, SMS, or KBA options.

Choose a delivery method that satisfies legal requirements for notice and service, supports required authentication strength, and maintains an immutable audit trail. Ensure your chosen platform supports export to PDF/A and secure long-term storage for compliance.

Key Dates and Deadlines to Track

Critical dates for a Financial Shake Agreement include effective date, payment milestones, notice periods, and deadlines for tax and record retention obligations.

Effective date and commencement of obligations:

When rights and duties begin.

Payment schedule deadlines and due dates:

List all installment due dates and grace periods.

Notice periods required for defaults:

State how and when notices must be delivered.

Tax reporting deadlines and filings:

Retain records for IRS reporting periods and consult tax counsel.

Record retention timeline and storage:

Follow federal retention standards; HIPAA records six years from creation.

eSignature Pricing and Feature Snapshot for Agreement Workflows

Compare typical eSignature plan features and starting prices relevant to executing Financial Shake Agreements and related workflows.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	No	No	Yes, limited	Yes, limited
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
Envelope Cap	No cap	100 envelopes/user/year	Varies by plan	Varies by plan	Varies by plan

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