Since July 29, 2014, more stringent regulations apply to payment delays

 

As of July 29, 2014, new rules on payment delays entered into force in Germany. These rules apply to all payments for commercial transactions entered into after July 28, 2014 and/or if the remuneration in a previously existing continuous commercial transaction is paid after June 30, 2016 (Article 229(34) Introductory Act to the German Civil Code). This somewhat concealed change of the law, which was adopted in connection with amendments to the Renewable Energies Act, transposed the Directive on combating late payment in commercial transactions, which the European parliament had already adopted in 2011, now also into German law.

The rules apply to enterprises in the private and public sector, which are late with payments. In drafting future contracts and/or general terms and conditions, it must be taken into account that periods for payment, verification, or acceptance are subject to more stringent effectiveness control.

The agreement of payment terms in excess of 60 days after receipt of the goods or services is now only effective, if it has been expressly agreed and is not grossly unfair to the creditor's interests. The maximum permissible period is reduced to 30 days, where the debtors are public authorities. The maximum period for acceptance is also 30 days. These periods may not be circumvented by any precautionary deviating agreements on the entry of a delay. What is considered in this connection as "grossly unfair," will only be shown by the jurisdiction of the courts at the end.

Another key new rule concerns delay lump sums. Accordingly, the creditor is entitled to a lump sum of EUR 40.00, if the debtor is in delay. In addition, the default interest rate was raised from previously 8 to 9 percentage points above the base interest rate.

Mainly the last two items may have surprising financial effects for debtors. Additionally, existing contractual agreements and/or general terms and conditions should be examined, so that they comply with the amendments and continue to withstand judicial review.

 

Please contact us for further information:

Dr. Tatjana Schroeder

E t.schroeder@skwschwarz.de
T +49 69 63 00 01-0
F +49 69 63 55 22

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