How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask P. Simmons Your Own Question

P. Simmons
P. Simmons, Attorney
Category: Business Law
Satisfied Customers: 27112
Experience:  12+ yrs. of legal experience.
11181181
Type Your Business Law Question Here...
P. Simmons is online now
A new question is answered every 9 seconds

What is the maximum late payment fee that can be charged to

Resolved Question:

What is the maximum late payment fee that can be charged to another business for Delinquent invoices in the state of Georiga?
Submitted: 1 year ago.
Category: Business Law
Expert:  P. Simmons replied 1 year ago.
Thanks for the chance to help. I am an attorney with over 12 years experience. Hopefully I can help you with your legal question.

There is not a set legal maximum...it is tied to the contract. A late payment is a form of "liquidated damages". And Georgia law specifically allows liquidated damages.

But to impose there must be an agreement (since contract law applies).

Can you tell me, was there an agreement on this ahead of time? Did the contract specify a late fee? And specify the amount?
Customer: replied 1 year ago.

We instituted the late payment fee last month and notified all customers via email that we were doing this effective immediately. However, we offerred each customer a grace period of 5 business days to get current and we would not charge any late payment fee.


All of our invoices and communications going forward do include this notice of the late payment fee policy.


Our invoices BEFORE we instituted this policy DID NOT stipulate any late payment fees, however, it did state that payment was due upon receipt.


 

Expert:  P. Simmons replied 1 year ago.
Thank you

And did your communication specify the fee? Like, for example, .5% of the bill per day, or $5/day, or whatever?

Or did it simply state "late fee"?
Customer: replied 1 year ago.

Yes.

Expert:  P. Simmons replied 1 year ago.
Thank you

That may be tough...

That is, simply stating "late fee" may be difficult to enforce if you land in court.

As I mention, GA law allows liquidated damages (late fees)....you can see that code here

http://law.justia.com/codes/georgia/2010/title-13/chapter-6/13-6-7/


So you can have a contract that provides for late fees.

But to enforce you need to show three things

(i) A determination that actual injury or damages otherwise for the party seeking the penalty are difficult or impossible to estimate with accuracy;

(ii) The parties to the contract mutually intended to provide for liquidated damages; and

(iii) Assuming the parties intended to include an express liquidated damages provision in contract, the amount of the specified liquidated damages must be a reasonable pre‑estimate of a probable loss in the event of a breach.

(See Physician Specialists in Anesthesia, P.C. v. MacNeill, 246 Ga. App. 398, 401 (2000); Caincare, Inc. v. Ellison, 272 Ga. App. 190 (Ga. App., 2005))


For your circumstances #2 is the key. You have to show agreement. That they agreed to the fee, including the amount.

Now...when you set your fee, be mindful of #3...you have to be "reasonable"...it can not be excessive.

What is excessive? THe law is not clear on that...it depends on the case. But over a few percent per day of the invoice would likely be excessive unless you can show a basis.

Example, say the invoice is $100. And you want to charge $10/day late fee...

Unless there is evidence to show that you would incur that damage (say, for example, it is a product whose price fluctuates and you stand to loose if you can not turn that capital around in a timely manner), that may be tough to justify....since a 5 day late fee could turn into 50% of the invoice.

BotXXXXX XXXXXne: You can charge a late fee...but you need to get them to agree to it including the amount and the amount can not be unreasonable.

Customer: replied 1 year ago.

thanks.


I just want to be sure you understood my "yes" in my last answer.


We did tell them the amount of the late payment fee and how it was to be calculated.

Expert:  P. Simmons replied 1 year ago.
Sorry...I did NOT understand...poor question...I asked "did you A or B" and you responded yes...I should have simply said did you A?

But the analysis is the same. Exactly. The law allows you to impose the fee (liquidated damages) so long as you meet those three prongs.

So long as they were on notice prior to the contract and accepted the contract? Then you can impose the liquidated damages.

Now...the contract is the order...so if they had notice of the fee prior to the order, and made the order? Then you are in contract and if they are late, you can impose the fee (again, assuming it is reasonable)
P. Simmons, Attorney
Category: Business Law
Satisfied Customers: 27112
Experience: 12+ yrs. of legal experience.
P. Simmons and 4 other Business Law Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
 
 
 

Meet The Experts:

 
 
 
  • Law Pro

    Attorney

    Satisfied Customers:

    1767
    20 years experience in business law - sole proprietor, partnership, and corporations
< Last | Next >
  • http://ww2.justanswer.com/uploads/LA/lawpro/2012-6-25_171315_PT206740s.64x64.jpg Law Pro's Avatar

    Law Pro

    Attorney

    Satisfied Customers:

    1767
    20 years experience in business law - sole proprietor, partnership, and corporations
  • http://ww2.justanswer.com/uploads/dkaplun/2009-05-17_173121_headshot_1_2.jpg Dimitry K., Esq.'s Avatar

    Dimitry K., Esq.

    Attorney

    Satisfied Customers:

    1495
    Run my own successful business/contract law practice.
  • http://ww2.justanswer.com/uploads/DC/DCraneEsq/2012-8-14_14436_DCrane.64x64.jpg MShore Law's Avatar

    MShore Law

    Attorney

    Satisfied Customers:

    1233
    Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements
  • http://ww2.justanswer.com/uploads/FL/FLAandNYLawyer/2012-1-27_14349_3Fotolia25855429M.64x64.jpg FiveStarLaw's Avatar

    FiveStarLaw

    Attorney

    Satisfied Customers:

    1174
    25 years of experience helping people like you.
  • http://ww2.justanswer.com/uploads/scottymacesq/2009-6-10_221523_small.jpg RGMacEsq's Avatar

    RGMacEsq

    Attorney

    Satisfied Customers:

    504
    Licensed Texas General Practice Attorney
  • http://ww2.justanswer.com/uploads/ohioatty/2009-1-22_185545_me.jpg J.Hazelbaker's Avatar

    J.Hazelbaker

    Attorney

    Satisfied Customers:

    393
    Experienced and trained in the area of business law.
  • http://ww2.justanswer.com/uploads/BA/barristerinky/2012-6-10_22423_office.64x64.jpg Barrister's Avatar

    Barrister

    Attorney

    Satisfied Customers:

    373
    14 years practicing attorney, MBA
 
 
 

Related Business Law Questions

Chat Now With A Business Lawyer
P. Simmons
P. Simmons
Attorney
185 Satisfied Customers
12+ yrs. of legal experience.