If a client is not paying invoices for interior design services that were rendered, what is the maximum late fee that can be charged?

Get Legal Help Today

 Secured with SHA-256 Encryption

If a client is not paying invoices for interior design services that were rendered, what is the maximum late fee that can be charged?

Client is 45 days late paying invoice. The client signed a contract which I use for my interior design company that states, “Overdue payments shall be subject to interest charges of 20% monthly”. I’ve never had a client not pay me before so I’ve never had to bill additional fees. Is it legal to bill an additional 20% in CA? If not, what should I do?

Asked on August 19, 2011 California

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

You have a few issues here. One, is that the other party entered in to the contract of their own free will and agreed to the late fee therein.  But I think that if they were to challenge the issue a court would see the 20% as excessive.  late fees are common in both business contracts and in residential contracts (landlord tenant law and leases) and are generally held to valid as long as they are reasonable. Your type of business thrives on its reputation and you do not want to be seen as the interior designed that goes around suing their clients.  But you have every right to be paid.  Have you called and spoken with the client?  Financial situations sometimes change after a contract is entered in to and maybe if you offered them to renegotiate the payment schedule you may see money flowing in.  If they are not receptive then I would not even bother with billing them any more but suing them for the money.  And include the 20% in the amount sued for.  The judge will strike it if they do not agree.  And change your contract.  5% seems reasonable but if the services are expensive maybe 1-2% monthly.  Good luck. 


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption