Clearing Agreement
/ˈklɪərɪŋ əˌɡriːmənt/
Definitions
- (n.) A contract between parties to facilitate the settlement of obligations arising from multiple transactions, typically by offsetting mutual debts and credits to minimize payment flows.
The clearing agreement reduced payment risks between the two financial institutions.
Forms
- clearing agreement
- clearing agreements
Related terms
See also
Commentary
Clearing agreements are commonly used in financial and commercial contexts to streamline obligations; specificity on the scope of transactions covered aids enforceability.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.