Posted: Wednesday, 10 April 2013 @ 10:58
Since I last blogged on the subject in November 2012 (click here to see it), there have been some changes which came into effect on 16 March 2013. The Late Payment of Commercial Debts Regulations 2013 only apply to contracts entered into on or after 16 March.
You may recall that if there is no contract credit period for payment, and no convention such as 30 or 60 days has been established, then the default period is 30 days. Because many contracts provide for longer periods for payment, and purchasers of goods or services have an unequal bargaining power, a cap has been introduced for contract terms. The maximum period for payment by local authorities will now be 30 days For all other cases the maximum contract period for payment will be 60 days, unless any later date is not “grossly unfair” to the supplier.
Another new provision is to recognise that in some contracts there is a procedure for acceptance or verification. Provided the purchaser has notice of the amount of the debt by the time the procedure is completed, time will only start to run from when the procedure is completed, and up to 30 days is allowed for the acceptance period. It can be a longer period if the parties agree and it is not “grossly unfair” to the supplier.
“grossly unfair” is defined as anything which is a gross deviation from good commercial practice and contrary to good faith and fair dealing.
Another change is the right to claim the costs of recovering the late payment interest. Previously a fixed sum was provided to cover costs. Now, if the fixed sum does not cover the reasonable costs of the supplier, the difference can be claimed. So there is yet more reason to make sure that you take advantage of these rights and claim from late payers.
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