Out of date T's & C's

Hi everyone, firstly thank you for setting up this site, it's excellent.

My question is this. I've only just become aware of the pay on time legislation. On the back of our order forms our T's & C's state that "Interest shall be payable on overdue accounts at the rate of 1.5% er month to run..." etc etc. When we created the order pads we were not aware of the legislation so did not know we could charge 8% on top of BOE base rate for contracts formed after the legislation came in.

So, could we apply the larger fee on forms written on order pads with these T's & C's on the reverse?

I would assume we can as the legislation is, well, legislation, so it becomes our legal right to do so regardless of what is on the back of the order pad. I know it's not ideal but we're just about to undertake one of our two largest selling periods of the year and I don't have any way of getting these order pads amended this time around.

Thank you for your help.

Chris

Hi Chris,

In answer to your question, your company is still covered by the existing late payment legislation, *however* the terms included on the reverse of the order form will supersede the legislation.

So in this case you would be limited to claiming interest at 1.5% as opposed to 8.5%.

Provided no other terms are included on the reverse of the orders relating to fixed costs and/or collection costs, you should still be able to include these in any subsequent claim for late payment.

Hope that helps.

Hi thanks for the answer.

I suppose at a push I could add some sort of addendum to the terms (an additional sheet of some sort) and have customers sign that at the time they place their order?

In reality I'll probably just take it on the chin for this sales season and get it changed going forward.

Many thanks again.

Chris

Hi Chris,

You could do that, but for the sake of 6.5% interest that may never be added, it may not make commercial sense.

However as stated provided no other terms relate to fixed costs you can still add those if the need arises. The same also goes for collection costs if you need to involve a third party in recovery.