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I have a vendor who is trying to add interest on late

I have a vendor...

I have a vendor who is trying to add interest on late invoices without prior agreement. They are adding the interest to the notes of the invoice after it is already late and it is not on the original invoice.

Lawyer's Assistant: What state are you in? And have you consulted a local attorney?

California. i haven't consulted anyone yet. i am a non-profit and don't have the resources for an attorney

Lawyer's Assistant: Has anything been officially filed? If so, what?

No

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

The invoices were sent very late. for example an invoice for services done the week of 1/9/17 wasn't created until 5/31/17 and the date of service is hand written on the invoice because the date printed as the service date is actually the date the invoice is created.

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Answered in 2 hours by:
10/15/2017
Damien Bosco
Damien Bosco, Attorney
Category: Business Law
Satisfied Customers: 3,681
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Hello: My name is ***** ***** I am an attorney. Please give me a moment to review your question. I may ask some questions to clarify issues.

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You are correct. According to the California Supreme Court, interest charges on unpaid invoices for goods and services are NOT legal if the right to collect interest is NOT set forth in your contract, or invoice, and if the amount of interest being charged is unreasonable.

So you seem to be aware that the vendor cannot charge interest without an initial agreement or contract to do so. Nevertheless, the vendor is doing so. Do you have enough to pay the original invoices without the added interest?

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Customer reply replied 4 months ago
Thank you. The vendor first tried to add a 10% late fee and I informed them that would have had to be stated on the initial invoice. Tonight I was emailed copies of all the invoices with this at the bottom of each one "Note: Interest of 120.0% per Annum will be charged on Balance> 90 days old." Because they sent us 6 months worth of invoices (January - June) in the month of June (billed weekly), we have been paying one month's invoices every month. We are verifying the accuracy of every invoice and have found errors on almost every invoice. We are requiring them to correct the errors before making payments. While we don't have enough to pay the balance today, we do have a donor who is contributing monthly to cover our medical expenses so we will have enough to pay the original amount next month.

Well, just because the vendor is adding interest to the invoices after the fact does not mean the vendor is permitted to do so. Isn't the vendor looking to work this out? Can you come up with a payment plan with the vendor?

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Customer reply replied 4 months ago
We stopped using them in May because we were having too many issues which is when they realized they were 6 months behind in billing and they created all the invoices. We have paid 3 months worth of invoices and have 3 months left which we agreed to pay half this month and the balance next month after all corrections are done. They are saying that the invoices are up to 10 months old and I have had plenty of time to review them and they encourage me to pay the outstanding balance.. I corrected them because the services were from January but the invoice is from June. Anyhow, they won't do any 'deductions' without management approval. Apparently they have forgotten that I am also informing them of things they have not billed us enough. Anyhow, I am relatively sure they are getting advice from someone unfamiliar with the history and unfamiliar with operating a business. I wanted to be sure I was not mis-stating anything because our donor was getting concerned that they would try to get to her because she is very wealthy and donates to many non-profit organizations. All invoices are to our corporation and all payments have been by our corporation and she is not linked to these invoices in any way. Thank you for your time - I think this will ease her worries.

The donor is not personally liable for the debts or alleged debts of the nonprofit. You can rest assured on that unless she is a director or officer and took money for her own purposes, which is not the case. This is a contract dispute between the vendor and corporation and is not a personal liability. We can continue to discuss or if you have follow-up questions, let me know.

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Hello again! Checking in to see if you need further help. Your satisfaction is my goal, and I'm happy to answer a related follow-up question you may have. If I have not answered your question completely or missed a question, please let me know and I will attempt to answer it. If you are satisfied with your answer, please provide a positive rating between 3 and 5 stars so I can get paid for the service I provided to you. Best regards.

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Customer reply replied 4 months ago
You have answered my questions and you will be getting a 5 star rating. Thank you very much for your help!

You are welcome!

Damien Bosco
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