|Late Payment of Commercial Debts|
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ApplicabilityAll, although this generally only makes sense for the first penalty
It is worth noting that once a debt exists it is possible for the parties to agree a way to handle that debt after it is created, and that agreement may allow for not charging a penalty. This cannot be agreed in advance or made part of the ongoing contract - it can only be agreed once a debt is created. It cannot be a standing agreement or ongoing agreement not to charge. In effect it would have to be agreed separately for each debt after it is created. It is also an issue that any such agreement would only be enforcable by the customer (i.e. stopping you charge the penalties later anyway) if it is a contractual agreement. This means the customer must give something in return for not charging the penalies or allowing longer to pay or whatever. Of course this is no different to any other contract term - we could, after the invoice, agree we will not charge for last months service. We don't. We are a business!
Of course you could say "We'll agree not to charge late payment penalties in future if you agree not to pay late in future" which kind of brings home the point that the customer broke their agreement in the first place. We have used this and got some confused replies.