Can a non-profit be charged a late fee due to a breach of contract?

UPDATED: Nov 26, 2013

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

UPDATED: Nov 26, 2013Fact Checked

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

Can a non-profit be charged a late fee due to a breach of contract?

We have a signed contract for services we provided to a non-profit organization. Per our contact, the balance is due on the date of an event. If balance is not received, a 10% late fee accrues each day payment is late. The non-profit has not paid the balance and is saying that the 10% late fee is not enforceable in the state? Is this true?

Asked on November 26, 2013 under Business Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

No, non-profits can be charged a late fee, if they agreed to pay one. However, the late fee you describe is not enforceable: a 10% fee per day is 300% per month, which is usury--indeed, it may even meet the definition of criminal usury. A reasonable late fee, agreed to in  a written contract, is enforceable.

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 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 lock Secured with SHA-256 Encryption