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Ask a Lawyer -- Contract Law
Contract Law Question 4
Question: I own my own cleaning service. We did some work for The Pines of Cloverlane and they are late on a payment. I know that they have 30 days to pay. When that 30 days is up, do I have the right to charge a late payment? If so how much can I charge?
Response: Generally, in commercial contracts between two private parties, a late fee can only be charged if the parties agreed to it in advance. Based upon the question, I assume your contract with The Pines does not provide for the imposition of a late fee should the customer fail to pay within 30 days. I always recommend that all commercial businesses use written contracts. This can be something as simple as your letter setting out the terms of the agreement that the customer signs to acknowledge acceptance prior to beginning work. The written agreement should contain, at a minimum, the following terms: name the parties, brief description of work to be performed, the price to be paid by the customer, and the payments terms including when payment due and late fee.
Submitted: 7-22-2005; Joseph, Michigan
Response: 7-26-2005; JJR
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