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Chris The Lawyer
Chris The Lawyer, Lawyer
Category: New Zealand Law
Satisfied Customers: 22672
Experience:  38 years qualified as a lawyer; LLB, MMgt and FAMINZ.
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We have a 3 month bill out standing from September to

Customer Question

Hi we have a 3 month bill out standing from September to December from a Contractor
for accommodation and meals. We informed them that we would start a late penalty of
10% for September increasing 20% next month with October plus 10% next month.
Can we also take away discount that we gave them.
Our policy is payment up front, but at the start they said they pay accounts on the 20th of following month. We are a small Husband and Wife team leasing a 8 unit Motel, and have
our own large overheads.
Thanks for your Time
sincerely ***** *****
Submitted: 1 year ago.
Category: New Zealand Law
Expert:  Chris The Lawyer replied 1 year ago.

The charges and penalty charges depend on the terms of your contract. You must have a clause which permits these charges. If you do have this, you need to be careful about charging compound interest because that is generally not legal. As for the discount, if that was offered on the basis they would pay on time, then you can put this back to the standard charge. It is important to have these in your terms so if you don't have them, I suggest you modify the contracts for this

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