GlossaryEN1 min readUpdated: Jun 13, 2026

payment clause

During the payment process between buyer and seller, the payment clause specifies when, in what amount, and by which method payment must be made.

Quick Answer

Last updated: 13 June 2026Published: 27 January 2026

Source: https://www.investopedia.com/terms/p/payment-term.asp

Category

Incoterms 2020 Simulator: Who bears costs & risk?

Reading time

1 min

Words

Mentioned in

–

Definition & Explanation

During the payment process between buyer and seller, the payment clause specifies when, in what amount, and by which method payment must be made. It also defines the consequences of late payment and forms the legal basis for payment obligations in the commercial relationship. In international trade, it is an integral part of purchase contracts and is often combined with documentary credits, bank transfer provisions, or cash-on-delivery arrangements. It differs from payment terms in that it specifically addresses contractual penalties and consequences of non-payment.

Next steps

Tools that match this term

Compare IncotermsClarify duties, cost and riskOpen Find HS codeDetermine the tariff number for customsOpen Calculate customs valueWork out import duties and customs valueOpen Calculate transit timeEstimate duration per transport modeOpen

Related Terms

You might also be interested in these terms

Payment clause; payment plan

A payment clause is a contractual provision specifying when and how payment must be made, including due date, method of payment, c…

Learn more

payment term

Freight forwarders and shippers agree on payment terms that specify when invoices are due, the payment periods (e.g. net 30, net 6…

Learn more

Export Payment Risk Management Systems

Once an exporter ships goods on open account or deferred payment terms, the risk of non-payment or late settlement by the overseas…

Learn more

Connected Freight Payment Systems

Connected freight payment systems typically reduce the time between service delivery and payment receipt from weeks to days or hou…

Learn more

customs payment

Once a shipment crosses the border and customs has determined the dutiable value and the applicable tariff rate, a customs payment…

Learn more

Payment partner verification

To prevent payment defaults and fraud, a forwarder or shipper assesses a potential partner's creditworthiness, payment history, an…

Learn more

⚖️ ICC Incoterms 2020

Incoterms 2020 Simulator: Who bears costs & risk?

Analyze all 11 Incoterms 2020: cost matrix, risk timeline, insurance gap detector and customs responsibility – free, no login required.

Incoterms Simulator →

Logistics knowledge straight to your inbox

Weekly: Top news, industry facts and insights from the world of logistics – free.

payment clause

Next steps

Related Terms

Payment clause; payment plan

payment term

Export Payment Risk Management Systems

Connected Freight Payment Systems

customs payment

Payment partner verification

Incoterms 2020 Simulator: Who bears costs & risk?

Logistics knowledge straight to your inbox

Community Questions & Answers