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.

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Last updated: 13 June 2026Published: 27 January 2026

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

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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.

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payment clause

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Related Terms

Payment clause; payment plan

payment term

Payment clause in a letter of credit

Export Payment Risk Management Systems

Connected Freight Payment Systems

customs payment

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