New Default Interest Law: Declaration of War on Late Payment

 

Since 1.8.2014, the Act to Combat Late Payment has been in force. This transposed an EU directive, albeit with a delay of more than a year. The law regulates the consequences of default in cases where a contractor or a contracting authority is in default of payment.

It exacerbates the consequences of late payment by raising the statutory default interest by one percentage point to 9 percentage points above the base interest rate.
In addition, it grants the payment creditor a claim to a lump sum of 40 euros in the event of default by the debtor.

The law restricts the possibility of arbitrarily postponing the obligation to settle a claim immediately by agreeing on payment, acceptance or review deadlines. For example, according to the law, a clause in general terms and conditions (GTC) is unreasonable in case of doubt and therefore invalid if it provides for a payment period of more than 30 days or a review or acceptance period of more than 15 days. The situation is different only if the debtor sets out special reasons for showing that the time limit is reasonable.

Note: Previously, clients and contractors had the opportunity to make individual payment terms and also individual purchase agreements; there were no legally defined deadlines. This changes with this law. The corresponding paragraphs of the German Civil Code, including §§ 271 +288, will be amended.

This means that even independently of general terms and conditions rules: If a company (public contracting authority) has been granted a payment period of more than 60 (30) days, the agreement is only valid if the company (public contracting authority) can prove that the agreement was expressly concluded and is not grossly unfair for the creditor.

In addition, if a contracting authority has been granted a payment period of more than 60 days, the agreement is invalid from the outset.

The opinion is often expressed that the new law remains ineffective. Because if larger companies exceed payment agreements illegally, small craft businesses in particular would not dare to take legal action against it for fear of future exclusion from orders. They would accept it in silence.

On the other hand, the narrow wording of the law will exert de facto pressure on systematic late payers.

In addition, depending on the point of view, there is the possibility or danger under the Injunction Act, where chambers of crafts and trade associations can issue warnings for violations on behalf of their members and have them prohibited by the court if the clause user refuses to change the terms and conditions.

How do you see the consequences of the change in the law? We look forward to your comments.

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