Payment
Contract Type:
Generic Contract
Jurisdiction:
The Client shall pay the Fees and any Additional Costs within 30 days of the date of receipt of a valid invoice. Any queries in respect of an invoice must be raised by the Client within 14 days of the date of the invoice. If the Client fails to pay any valid invoice within 30 days of the date of the invoice, the Firm may charge interest on the outstanding amount at a rate of 8% per annum from the date payment fell due until the date of actual payment. The Firm may also suspend work on the Client's matter until payment of the outstanding invoice has been made.
Explanation
Here is a plain English explanation of the Payment clause:
- The Client must pay the Fees and any Additional Costs within 30 days of receiving a valid invoice from the Firm.
- If the Client has any questions about the invoice, they must ask the Firm within 14 days of getting the invoice.
- If the Client does not pay a valid invoice within 30 days of the invoice date, the Firm can charge 8% yearly interest on the unpaid amount. This interest starts running from the due date until the Client pays.
- The Firm can also stop working on the Client's matter until they pay the overdue invoice.
- The purpose is to give the Client 30 days to pay invoices, require any invoice issues to be raised quickly, and allow the Firm to charge interest on late payments.
- It also lets the Firm pause work to motivate payment of outstanding invoices.
- This covers the timeline and process for the Client to pay the Firm's fees and costs.
Payment terms have been a fundamental part of contractual agreements throughout history. In ancient times, payment clauses dealt with bartering of goods or services.
Complex payment schedules were rare due to primitive economic systems. Written contracts formalized the payment expectations between parties for major transactions like land transfers.
With the spread of commerce and banking from the Middle Ages onward, payment terms became more sophisticated. Merchants required evidence of ability to pay upfront or according to installments. Payment timelines allowed for travel over long distances carrying valuables. Interest and penalties tackled late payments.
Industrialization led to more complicated projects requiring staged payments. Service contracts also needed payment schedules over long durations. Payment terms became lengthier to address various client-vendor situations.
By the modern era, payment clauses evolved to suit paper monetary systems. They set expectations for invoicing, documentation, and wire transfer timing. Interest rate terms compensated slow payment.
Today, standard payment clauses balance flexibility for the payer with assurances for the payee. They motivate timely payment while allowing leeway for good faith disputes.
The longevity of payment clauses underscores their importance in formalizing this critical contract issue.
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