When it comes to business agreements, one term that often comes up is “percentage due upon execution of agreement.” This refers to the amount of money that is required to be paid by one party to the other upon signing the agreement.
In most cases, the percentage due upon execution of agreement is a small portion of the total agreement cost. It is typically used to demonstrate a commitment from both parties to fulfill the terms of the agreement. This payment is sometimes referred to as an “earnest money deposit” or a “good faith deposit.”
The percentage due upon execution of agreement often ranges between 10% and 25% of the total cost of the agreement. The amount can vary depending on the nature of the agreement and the parties involved.
For example, in a real estate transaction, the buyer may be required to pay a percentage of the purchase price as an earnest money deposit. This deposit demonstrates the buyer`s commitment to purchasing the property and is used to secure the property during the due diligence period.
Similarly, in a service agreement, the client may be required to pay a percentage of the total cost of the project as a good faith deposit. This deposit demonstrates the client`s commitment to working with the service provider and is used to secure the service provider`s time and resources.
It is important to note that the percentage due upon execution of agreement is typically non-refundable. This means that if one party fails to fulfill the terms of the agreement, the other party may keep the deposit as compensation for the time and resources invested in the agreement.
In conclusion, the percentage due upon execution of agreement is an important term in business agreements. It demonstrates a commitment from both parties to fulfill the terms of the agreement and provides a level of security for both parties. However, it is important to understand that this deposit is typically non-refundable and should not be entered into lightly.