Are You Paying Enough Interest to Interest?

A common issue in construction-related disputes is the issue of contractual interest or “finance charges” billed by many subcontractors and suppliers to their customers. In my experience, it’s more common than not that subcontractors include some language on their invoices to the effect that “Interest is payable at 2% per month on overdue invoices.” This line usually appears near the bottom of each invoice or, in some cases on the reverse side in fine print. Normally nobody pays much attention to that line. That is, of course, until the bill goes unpaid for several months. When the subcontractor runs out of patience and launches a lawsuit to collect the debt, inevitably the amount the cl

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