This Agreement becomes effective when the Creditor places one or more accounts (“Accounts”) with the Agency for collection, and such placement constitutes full agreement to and acceptance of these Collection Terms and Conditions.
1. Nature of Collection Accounts
Creditor represents and warrants that all Accounts are commercial/business debts that are valid and legally enforceable, and unless disclosed (i) have not been previously placed with another collection agency, and (ii) are not subject to any known bona fide disputes. Creditor further represents that it has full authority to place such Accounts for collection and agrees to provide documentation and assistance required to support collection efforts. Creditor shall indemnify and hold Agency harmless from any claims, damages, or expenses arising from any breach of these representations.
2. Collection Fee Structure
Creditor agrees to pay the Agency a commission on all amounts collected, regardless of whether payment is received by the Agency, the Creditor, or a third party on the Creditor’s behalf. These are standard agency fees and may be adjusted based on the age, amount, and viability of the debt. We will confirm any rate changes by email.
- 27% for Accounts aged up to 365 days from the oldest invoice date.
- 35% for Accounts placed with an attorney.
- 35% for International Accounts plus a 5% fee for currency conversion and international wire or transfer fees.
- In all cases, a 7% surcharge if over 365 days.
All fees are payable in U.S. dollars.
3. Direct Payments to Creditor
If Creditor receives payment directly from a debtor after the Account has been placed for collection, Creditor shall notify Agency within five (5) business days, and remit Agency’s commission within fifteen (15) days of receipt.
4. Non-Cash Consideration
If Creditor accepts returned goods, credits, or any form of non-cash consideration in settlement, the Agency’s commission shall be based on 1/2 the amount of the debt. For the purposes of this Section, “credits” refers exclusively to non-monetary trade consideration (such as future advertising credits) and expressly excludes monetary credits applied to an accounts payable or receivable ledger, ensuring the Agency’s full entitlement to standard commission on any monetary credit or offset.
5. Handling of Funds
Agency is authorized to:
- Endorse and deposit instruments received.
- Hold funds in trust pending clearance.
- Deduct earned commissions, attorney fees, and authorized charges from the total funds held by the Agency (regardless of which specific Account generated the funds) prior to remitting the remaining proceeds to the Creditor.
6. Legal Cost Reserve
When litigation is required to collect from recalcitrant debtors, Creditor may elect to maintain a legal cost reserve with Agency to ensure prompt action without the delay of remitting individual attorney fees. Funds in the reserve, whether deposited directly or deducted from Account collections, shall be used solely for attorney fees and related legal expenses incurred on Creditor’s behalf. Upon termination of this Agreement, any remaining balance—net of all amounts owed to Agency across all Accounts—shall be returned to Creditor.
7. Attorney Placement and Legal Action
The Creditor hereby appoints Agency to act as its authorized agent to forward Accounts to attorneys for legal action and to communicate with such attorneys on Creditor’s behalf. Agency bears no liability for attorney selection, performance, costs, or outcomes, regardless of whether the attorney was recommended or selected by the Agency. Attorneys act on behalf of the Creditor, not the Agency, and Agency bears no liability for acts or failure to act of attorneys. Creditor and attorneys may communicate directly at any time. Agency acts solely as a forwarding intermediary and is not responsible for any attorney’s acts or omissions. Notwithstanding the Collection Fee Structure detailed in Section 2, Creditor shall be responsible for all court costs, filing fees, and any additional legal fees as agreed with the attorney. The Client retains absolute control over the litigation. Receiving Counsel represents the Client directly. No settlement offers, legal strategies, or lawsuit filings shall be made without the Client’s express written authorization.
8. Withdrawal or Suspension of Accounts
Creditor may withdraw or suspend Accounts upon written notice by email, confirmed by phone or return email. In such event, Agency shall be entitled to its full commission as if the Account were collected if any of the following occur: (i) Creditor has received payment, or entered into a payment agreement, within one hundred eighty (180) days following withdrawal or suspension; (ii) Creditor rejects a settlement opportunity presented by Agency; (iii) Agency has initiated material collection activity in connection with the Account, including debtor contact or settlement discussions; or (iv) Legal action has been initiated or authorized.
9. Right to Refuse or Terminate
Agency reserves the right to refuse placement of any Account or to suspend or terminate services if Creditor fails to reasonably cooperate, fails to provide required documentation, or continued collection activity is deemed commercially impracticable or unfeasible. Agency may terminate services at its sole discretion if, in the Agency’s judgment, continued collection activity is deemed unfeasible.
10. Limitation of Liability.
Agency shall not be liable for any indirect, incidental, consequential, punitive, or special damages, including loss of profits or business interruption. Agency’s total liability shall not exceed the commissions earned on the specific Account giving rise to the claim.
11. Payment Terms.
Agency fees and costs are due as outlined herein. Any unpaid fees or costs shall accrue interest at 1.5% per month (or the maximum rate permitted by law). Client will be responsible for all costs incurred to collect past-due fees.
12. Governing Law and Venue.
This Agreement shall be governed by the laws of the State of New Jersey. Venue shall lie exclusively in Mercer County, New Jersey. The parties waive the right to a jury trial.
13. Entire Agreement.
This Agreement constitutes the entire understanding between the parties and supersedes all prior agreements or discussions.
For questions or additional information, please contact info@leibsolutions.com.