On 16 March 2013, new regulations came into force in relation to the Late Payment of Commercial Debts (Interest) Act.
Enacted to incorporate a recent EU Directive, these new regulations introduce a maximum payment period of 30 days into commercial contracts with public authorities and a default 60 day payment period into business to business commercial contracts.
Parties to business to business contracts may agree to payment periods which are longer than 60 days provided that the arrangement is not “grossly unfair” to the supplier. If such a provision is grossly unfair, parties will find their terms unenforceable and replaced by the statutory provisions, with interest being due at 8% above base rate on sums overdue after 60 days.
Please see full alert below for more information.