A contractor recently asked for some advice regarding a client not paying on time. The contract between the contractor and client stated 30 day payment terms but the client has been taking over 90 days to pay an invoice for their work.
A contractor will often sign a contract before they start working for a client. Payment terms are often stated in that contract so once an invoice is raised for your work, the client should honour the payment terms and settle within that time. But what if they don’t?
The response from a legal consultant answering the contractors question on Freelance UK said that by not paying within the payment terms, the client was in breach of contract and they would be at liberty to terminate on the grounds of the breach.
He also added that unless the contract has a specific provision for interest on late payments, they may also be entitled to fixed payments and interest under the Late Payment of Commercial Debts (Interest) Act 1999. The fixed payment is £70 for an invoice between £1,000 and £10,000, and interest is at 8.5%.
This made us raise the question; do your clients pay on time? If not, what action have you taken with the client?
