Is an electronic signature valid?

Yes. Electronic signatures are legally enforceable under the ESIGN Act (15 U.S.C. ch. 96) and UETA in most states, provided intent, consent, attribution, and retention requirements are met.

When is notarization required?

Notarization is rarely required for a Payment Good Faith Agreement itself but may be required for related documents in certain states or when real property is affected; check state rules.

Can the agreement be revoked?

Revocation depends on contract terms. A unilateral revocation may be ineffective if the document creates binding obligations; include explicit termination and revocation clauses to avoid uncertainty.

What if a payment fails?

Follow the remedies described in the agreement (notice, cure period, collection costs). If tax reporting is affected, consult an accountant regarding backup withholding or IRS reporting obligations.

How long must records be kept?

Retain signed agreements and audit trails per applicable rules: generally at least 3 years for tax records (IRC §6501(a)) and 6 years for HIPAA-related records (45 CFR §164.530(j)).

How to improve evidentiary strength?

Use robust signer authentication, preserve the full audit trail, include clear signatory authority language, and, when appropriate, notarize or use remote online notarization with recorded sessions.

Electronic Signature
Templates
Miscellaneous
Payment Good Faith Agreement

Payment Good Faith Agreement

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

PAYMENT GOOD FAITH AGREEMENT

Parties

Payor (Party A) — Name Payor (Party A) — Address Payee (Party B) — Name Payee (Party B) — Address

Recitals

WHEREAS, Payee provided goods and/or services invoiced under Invoice No. dated (the "Invoice"); and

WHEREAS, the outstanding balance due under the Invoice is $, which Payor acknowledges in good faith and desires to repay according to the terms set forth in this Agreement; and

WHEREAS, the parties wish to set forth a binding, good faith payment arrangement to avoid further dispute or collection action.

Scope of Work

The parties agree that the Invoice and any related work described below constitute the underlying obligation to which this Agreement relates. Payee confirms that the services described below are complete or will be completed in accordance with the parties' agreement.

Describe goods or services (Scope)

Payment Terms

Total Amount Payable: $, representing the full good faith amount agreed to be paid under this Agreement.

Payment schedule (detail dates, amounts, milestones)

If payment is to be made in installments, check here: . If checked, specify installment amount $ and due on the day of each month.

Payment method: . All payments shall be applied first to fees and interest, then to principal.

Late Payment: If any payment required under this Agreement is not received within days of its due date, Payor shall pay a late fee equal to the greater of (a) % per month on the overdue amount, or (b) $. Late fees shall accrue from the day following the missed due date until payment in full.

Term and Termination

Term: This Agreement commences on and, unless earlier terminated in accordance with this Agreement, continues until the outstanding balance and all fees are paid in full or until .

Termination for Cause: Either party may terminate this Agreement upon written notice if the other party materially breaches any term and fails to cure within days after receipt of written notice specifying the breach. Termination does not relieve Payor of obligations accrued prior to termination, including accrued interest and fees.

Confidentiality

The parties acknowledge that the terms of this Agreement, including amounts and payment terms, constitute confidential business information. Neither party shall disclose such terms to any third party except (a) as required by law or legal process, (b) to its accountants or legal advisors on a confidential basis, or (c) as necessary to enforce this Agreement. This confidentiality obligation shall remain in effect for a period of from the Effective Date.

Representations and Warranties

Each party represents and warrants that it has the full power and authority to enter into this Agreement and to perform its obligations hereunder, and that the person signing on its behalf is authorized to do so.

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. Venue for any dispute arising hereunder shall lie in the state or federal courts located in that state.

Remedies and Costs

If Payor defaults under this Agreement, Payee shall be entitled to pursue all remedies available at law or in equity, including recovery of reasonable attorneys' fees, collection costs, and court costs incurred in enforcing this Agreement.

Entire Agreement

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior oral or written understandings, negotiations, and agreements. Any amendment or modification must be in writing and signed by both parties.

Miscellaneous

Notices required under this Agreement shall be sent to the addresses set forth above and shall be effective upon receipt. Neither party may assign this Agreement without the prior written consent of the other, except that Payee may assign receivables to a third party provided such assignment does not increase Payor's obligations.

Payor (Printed Name):

By:

Date:

Payee (Printed Name):

By:

Date:

What the Payment Good Faith Agreement Is and when it’s used

A Payment Good Faith Agreement is a written, signed record documenting a payer’s stated intent to satisfy a payment obligation under agreed terms. It typically sets the payment amount, schedule, parties, and any conditions or contingencies. These agreements are used to formalize promises to pay during negotiations, settlements, installment arrangements, or to document a payer’s commitment before formal instruments like promissory notes are executed. When signed correctly, the document creates evidence of intent that can support dispute resolution, collections, or creditor decision-making.

Why a clear Payment Good Faith Agreement matters

A concise Payment Good Faith Agreement reduces ambiguity about payment terms, documents intent for enforcement, and supports compliance with electronic signature laws such as the ESIGN Act (15 U.S.C. ch. 96) and state UETA statutes. Properly executed agreements lower litigation risk and accelerate collections or settlement performance.

Who typically prepares and signs these agreements

Parties who sign should be authorized representatives with authority to bind their organization; the agreement should indicate signatory authority and include supporting identity verification if signed electronically.

Creditors and collection departments documenting a payer commitment during negotiations, often to avoid immediate litigation or demand letters.
Legal counsel preparing settlement terms or documenting payment milestones as part of dispute resolution.
Small businesses and contractors securing a buyer’s promise to pay before shipping goods or suspending services.

Essential components to include in a professional Payment Good Faith Agreement

A complete Payment Good Faith Agreement balances clarity and brevity: include parties, payment terms, dates, conditions, remedies, and signature blocks so the document is actionable and defensible.

Parties

Full legal names and entity types for payer and payee, including mailing addresses to identify who is bound by the agreement and where notices should be sent.

Payment Terms

Exact dollar amounts, installment schedule, due dates, method of payment, and any late fees or interest rates that apply if the payer defaults on the agreed schedule.

Effective Date

The date when the agreement takes effect; this governs performance obligations and timeframes for cure or notice periods.

Conditions

Any conditions precedent or contingent events (for example, receipt of funds, delivery milestones, or third-party approvals) that affect payment obligations.

Remedies

Consequences for nonpayment, including acceleration, collection costs, dispute resolution method, or specific steps required to cure a missed payment.

Signature Block

Designated signatory fields with printed name, title, date, and a clear statement that the signer has authority to bind the named party.

Step-by-step: completing the Payment Good Faith Agreement

Follow these sequential steps to prepare, review, and finalize the agreement so it is enforceable and clear for all parties.

01

Draft core terms: Outline parties, amount, schedule, and conditions before adding ancillary clauses.
02

Verify authority: Confirm signers have authority to bind their organization.
03

Choose signing method: Decide between in-person notarization or an electronic signature with adequate authentication.
04

Record and retain: Save final signed copy and audit trail for retention and possible dispute evidence.

How to configure an online signing workflow for this agreement

Set up fields, authentication, and routing so signers complete the agreement in the right order and every action is auditable.

Field	Configuration
Signature Field	Require sign, date, and printed name for each party.
Order	Select sequential or parallel signer order based on negotiation needs.
Authentication	Use email plus SMS code or ID verification when stronger identity proof is required.
Notifications	Enable reminders and confirmation receipts to all parties after completion.

Where to send or submit a completed Payment Good Faith Agreement

Determine routing destinations for the signed agreement and supporting evidence to ensure proper recordkeeping and next steps.

Primary Payee: Send executed copies to the payee’s legal or finance contact for accounts receivable processing.
Payer Records: Provide a signed copy to the payer for their accounting and tax records.
Legal Counsel: Deliver to both parties' attorneys when used in settlement or dispute contexts.
Escrow or Payment Processor: If funds route through escrow, forward the agreement to the escrow agent with instructions.

Digital signing and technical requirements

Retain the platform’s certificate of completion and ensure storage meets your compliance needs (HIPAA BAA if health data present, 21 CFR Part 11 for FDA-regulated records).

Formats Supported: PDF and DOCX exports for legal preservation.
Integrations: Connect to systems such as Salesforce or NetSuite for automation.
Authentication: Email, SMS, or ID-proofing depending on risk.

Common deadlines and critical timing for payment commitments

Define and communicate key dates so both parties understand payment windows, cure periods, and expiration of the good-faith commitment.

Effective Date:

Date obligations begin; use MM/DD/YYYY to avoid ambiguity.

First Payment Due:

Specify exact calendar date or event triggering the first installment.

Cure Period:

Number of days allowed to remedy a missed payment before default consequences apply.

Offer Expiration:

Deadline for accepting or signing the commitment before terms lapse.

Retention Deadline:

Date by which copies must be archived for compliance or tax reporting.

Common preparation mistakes to avoid

Using informal or ambiguous payment descriptions that leave room for differing interpretations during enforcement or collection.
Failing to verify the signer's authority, which can leave the agreement unenforceable against a corporate party.
Omitting authentication records when the document is signed electronically, reducing evidentiary value in disputes.
Neglecting to retain the audit trail and final signed PDF, complicating tax reporting and compliance reviews.

Risks and legal consequences of an incorrect agreement

Enforceability Risk: Incorrect signer authority may render the agreement void.

Tax Consequences: Missing or incorrect payee data can trigger backup withholding (24%) or IRS reporting issues.

Collection Costs: Unclear remedies increase litigation and collection expenses.

Regulatory Violations: Failing to follow HIPAA or financial rules where applicable may incur fines.

Fraud Exposure: Inadequate identity proofing raises fraud and repudiation risk.

Recordkeeping Failure: Discarded or missing records can impede audits or statute of limitations defenses.

How a Payment Good Faith Agreement compares to similar payment documents

Compare core characteristics to choose the right document for your situation: informal commitment versus formal loan instrument.

Criteria	Payment Good Faith Agreement	Promissory Note
Formality	typically informal	formal, legally enforceable debt instrument
Payment Schedule	flexible, negotiation-based	fixed schedule with legal remedies
Security Interest	rarely secured	often secured, may include collateral
Typical Use	document intent or settlement promises	create enforceable loan obligation

eSignature vendor comparison for signing the Payment Good Faith Agreement

Platform choice affects authentication, audit trail, and compliance. This table shows starting prices and key features for common providers; signNow is listed first per comparison policy.

	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
HIPAA Compliant	Yes	Yes	Yes	No	No

Real-world examples of using a Payment Good Faith Agreement

Examples show how organizations use a written commitment to secure payment intent before final contract formation or delivery.

Optica Ventures — COO

Optica used a signed commitment to document client payment intentions during negotiations, reducing disputes about timing and amounts.

The interface is simple and easy-to-use for our team.
The recorded commitment helped the company avoid delays and provided clear evidence during follow-up collections, improving client communication and internal tracking.

Martin Properties — Founder

A property management firm documented tenant payment plans when rent was deferred, ensuring mutual expectations were clear.

I can process and execute all of these documents online with 100% compliance.
Having signed commitments on file simplified enforcement of late fees and informed management decisions on tenant accounts while preserving audit trails.

Who typically has authority to sign

CFO

Chief Financial Officers or equivalent finance executives usually have authority to bind corporate payers for payment commitments and should be identified in the signature block with title and date.

Authorized Agent

Designated officers, managers, or agents with written delegation may sign on behalf of an entity; retain evidence of delegation or corporate resolution for enforcement.

Practical tips for accurate, efficient completion

Small drafting and process choices reduce disputes and improve enforceability—apply the following practical best practices.

Be explicit about payment mechanics

State the exact payment method, account details or escrow instructions, and any fees for failed payments to avoid ambiguity and reduce processing delays.

Confirm signer authority in writing

Require a title and printed name, and for organizations keep a copy of a corporate resolution or authorization on file to support enforceability.

Preserve audit trails

When using eSignatures, retain the certificate of completion, IP address, timestamps, and any authentication logs to show intent and attribution.

Limit vague terms

Avoid phrases like 'reasonable efforts' or 'best efforts' without definition; define measurable triggers and deadlines for performance and cure periods.

Frequently asked questions about the Payment Good Faith Agreement

Answers to common questions about validity, signing, notarization, revocation, and recordkeeping to help practitioners avoid routine pitfalls.

Need help? Contact support

Is an electronic signature valid?
Yes. Electronic signatures are legally enforceable under the ESIGN Act (15 U.S.C. ch. 96) and UETA in most states, provided intent, consent, attribution, and retention requirements are met.
When is notarization required?
Notarization is rarely required for a Payment Good Faith Agreement itself but may be required for related documents in certain states or when real property is affected; check state rules.
Can the agreement be revoked?
Revocation depends on contract terms. A unilateral revocation may be ineffective if the document creates binding obligations; include explicit termination and revocation clauses to avoid uncertainty.
What if a payment fails?
Follow the remedies described in the agreement (notice, cure period, collection costs). If tax reporting is affected, consult an accountant regarding backup withholding or IRS reporting obligations.
How long must records be kept?
Retain signed agreements and audit trails per applicable rules: generally at least 3 years for tax records (IRC §6501(a)) and 6 years for HIPAA-related records (45 CFR §164.530(j)).
How to improve evidentiary strength?
Use robust signer authentication, preserve the full audit trail, include clear signatory authority language, and, when appropriate, notarize or use remote online notarization with recorded sessions.

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