Colorado General Form of Factoring Agreement — Assignment of Accounts Receivable is a legal document that outlines the terms and conditions between a factoring company and a business looking to sell its accounts receivable for immediate cash flow. This type of agreement is commonly used in Colorado and provides a framework for the assignment and subsequent purchase of accounts receivable by the factoring company. The Colorado General Form of Factoring Agreement — Assignment of Accounts Receivable typically includes the following key provisions: 1. Parties involved: The agreement clearly identifies the factoring company (referred to as the "factor") and the business selling its accounts receivable (referred to as the "client"). 2. Assignment of accounts receivable: This section outlines the specific accounts receivable that the client wishes to assign to the factor. It specifies the amount, date, and other relevant details related to each account. 3. Purchase price and fees: The agreement outlines the purchase price that the factor agrees to pay for the assigned accounts receivable. It may include fees such as service charges, factoring fees, and interest rates applicable to any advances made by the factor. 4. Representations and warranties: This section covers the statements made by the client regarding the validity and accuracy of the assigned accounts receivable. The client must guarantee that the receivables are free from any liens, claims, or disputes. 5. Notification and verification: The agreement specifies the procedure for notifying the debtor (the entity responsible for paying the accounts receivable) about the assignment. It also allows the factor to verify the accuracy and validity of the assigned accounts. 6. Collection and default: This section outlines the roles and responsibilities of both the factor and the client in collecting accounts receivable. It includes provisions for default by either party, such as non-payment or breach of contractual obligations. 7. Confidentiality and non-competition: The agreement may include provisions requiring the client to maintain strict confidentiality regarding the factoring arrangement and to refrain from competing with the factor in the future. 8. Governing law and dispute resolution: This section specifies that the agreement is governed by the laws of the state of Colorado and outlines the method for resolving any disputes that may arise. Some variations or specific types of Colorado General Form of Factoring Agreement — Assignment of Accounts Receivable may include: 1. Recourse vs. non-recourse factoring: Recourse factoring allows the factor to recourse back the unpaid accounts to the client, whereas non-recourse factoring absolves the client from liability if the debtor defaults on payment. 2. Spot factoring: This arrangement allows the client to selectively factor specific accounts receivable rather than assigning all receivables to the factor. 3. Invoice factoring: This type of factoring focuses on the purchase of individual invoices rather than assigning accounts receivable as a whole. In conclusion, the Colorado General Form of Factoring Agreement — Assignment of Accounts Receivable is a legal document that governs the relationship between a factoring company and a business selling its accounts receivable. It establishes the rights, obligations, and procedures involved in the assignment and purchase of accounts receivable.