You Might Be Thinking…

“I’ll just pay the invoice when the supplier issues it.”
But with expensive machines, that is risky. A well-structured installment schedule protects both buyer and seller – one has security of delivery, the other of payment.

Clients Often Ask Me…

• What percentage is a typical down payment?

• Can installments be tied to phases (transport, installation, commissioning)?

• Can I withhold part of the price until the machine is running?

• What if the buyer stops paying?

• How can payments be secured through an escrow account?

Legal Framework in Brief

• § 2080 Civil Code: A purchase price is sufficiently certain if at least the method of its determination is agreed.

• §§ 2132–2134 Civil Code: Retention of title – the buyer becomes the owner only after full payment.

• § 2128 Civil Code: Escrow accounts are standard in real estate but can also be used for machinery.

• Installment schedules are common practice in B2B contracts.

How to Structure an Installment Schedule

1. Down Payment

• Usually 20–40% upon signing.

• Protects the seller from undue risk.

2. Progress Payments

• Next installment upon delivery of the machine.

• Another upon installation.

3. Final Payment

• The last installment only after signing the handover protocol.

• Ensures the buyer pays only when the machine is operational.

4. Securing Payments

• Retention of title – ownership passes only after full payment.

• Bank guarantee or promissory note.

• Lawyer’s or notary’s escrow account.

Risks and Common Mistakes

• Paying the full price upfront → buyer loses leverage.

• No clear schedule → disputes about when payments are due.

• Unbalanced terms → favoring only one party.

• No retention of title clause → risk of losing the investment.

Lawyer’s Checklist

✔ Define down payment and installment amounts.
✔ Tie payments to delivery milestones.
✔ Make the final payment conditional on the protocol.
✔ Secure payments through escrow or retention of title.

FAQ

Is it normal to pay a deposit upfront?
Yes, typically 20–40%.

Can I pay only after installation?
Yes, I recommend making the final payment conditional on the handover protocol.

What if the buyer doesn’t pay?
The seller may withdraw from the contract and reclaim the machine (retention of title).

Can escrow accounts be used for machinery too?
Yes, although more common in real estate.