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: 35002
Experience:  12+ yrs. of legal experience.
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

This answer was rated:

What is the maximum late payment fee that can be charged to another business for Delinquent invoices in the state of Georiga?
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 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 4 years 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.


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 4 years 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) can see that code here

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 have to be "reasonable" can not be excessive.

What is excessive? THe law is not clear on 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 4 years ago.


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.

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 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 and other Business Law Specialists are ready to help you