Commercial Contract Clauses: Interest Rates on Late Payments

Submitted by Rocco Limongelli on Fri, 05/22/2020 - 10:19
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When you enter into a contract with a supplier (B2B), you must always make sure to specify the interest rate that you will pay on late payments.

We advise our clients to insert interest rates between 3 and 5% per annum, depending on the value of the contract. However, you should always aim to pay in time in order to maintain a good business relationship with your suppliers.

Many businesses are wrong in thinking that by omitting an interest rate clause, they will not be liable to pay any interests on late payment.

In fact, if the contract does not mention an interest rate, the supplier will be able to apply the statutory interest of 8% plus the Bank of England base rate (per annum) for business to business transactions.

 

At Optimal Solicitors, we can help you draft commercial contracts to protect your business interests and build long lasting business relationships. Please contact Rocco Limongelli on 0161 250 7771 , who will be able to assist you.

Author

Rocco Limongelli
Rocco Limongelli
Corporate and Commercial Solicitor at Optimal Solicitors Rocco joined Optimal Solicitors in April 2020, setting up the Corporate and Commercial department. He practices in both corporate and commercial law, and has particular experience in the fintech, technology and fashion sectors. Rocco has also particular expertise in dealing with cross-border matters, having assisted clients from all over Europe. He has a commercially aware approach when advising clients. He understands how to work with highly driven and business minded clients, and getting deals done. He also advises on corporate transactions, including mergers and acquisitions, joint ventures, corporate re-organisations and shareholders disputes. Rocco also advises on a wide range of commercial and contractual arrangements, including drafting of terms and conditions, GDPR compliance, outsourcing agreements and SaaS agreements. Rocco has the skills to help you set up, run and expand your business worldwide.
 
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