Is a business required to disclose late fees or finance charges on an invoice in order to legally add charges for late payments?

  • 1
    Not mandatory, but it's smart to have it. – Peter MV Jan 19 '15 at 19:31
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    We're not lawyers here. My inclination is yes you must disclose penalties before you can enforce penalties. I don't think any (US) court would allow a business to add on charges which are not disclosed. – Scott Jan 19 '15 at 22:59
  • You'll need to at least mention how you're starting the work (with a contract or not, through an agency or not, etc), and where you and the client(s) are located to get a proper answer. – Canadian Luke Jan 21 '15 at 23:18

I believe it's better business practice to discuss late fees or finance charges at the front end of a project. You may have difficulty from a legal standpoint trying to enforce something that's not in your contract. (and you should have a written contract for all work you perform for others.

Late fees are part of my contract that I use before I begin work. (the following is from my contract in the "Terms" section)

  1. Time for Payment All invoices are payable within 30 days of receipt. A 1 1/2% monthly service charge is payable on all overdue balances. The grant of any license or right of copyright is conditioned on receipt of full payment.
  2. Default in Payment The Client shall assume responsibility for all collection of legal fees necessitated by default in payment.

My invoices include the payment terms (i.e. Net 30 or whatever has been agreed to, and a note at the bottom with a restatement of the contracted late fee terms)

| improve this answer | |
  • I added the actual language from my contracts. Hope that helps. – Voxwoman Jan 22 '15 at 3:47
  • It's my first day here... getting the hang of things. :) – Voxwoman Jan 22 '15 at 3:51
  • Additionally, if you don't state your fees beforehand, in the event that you do end up claiming for late fees you'll (probably) only be able to claim the statutory amount, which will vary depending on your area. For example, in the UK it's currently 8.5%. – Dre Jan 22 '15 at 11:17

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