Is it legal for me to charge an 18% late fee on an invoice that is past due?

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Is it legal for me to charge an 18% late fee on an invoice that is past due?

Terms are 15-30 days (depending on the invoice). And on every invoice I state my term’s and conditions which list my late fee policy. Can I get sued for usery for charging this one time late fee per late invoice? Client has been late paying different invoices for 2 months now. This is the first time for me to enforce a late fee after said invoice was 6 days past due after it’s 15 day term.

Asked on February 12, 2013 under Business Law, Texas

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Here is the deal. You cannot charge more than I believe 6% per year or a portion per month if you don't include the interest charge language in your contract with your customer when you first contract with him or her. If you do include the language, then you need to be aware that it applies after 30 days to be allowed to charge the 18%. If you don't have the languae in your contract and you charge the 18% anyway on the invoice, you can be held liable for illegal usury for much more than the original contract. The mere charging is sufficient to be liable.


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