Contracts: Compensation in the event of overdue payment - What can you claim?

Publication date: 26 January 2017
Creditors are entitled to statutory (commercial) interest over the period a defaulter is too late making payments. In addition, a penalty for overdue payment may be included in the contract. Can a creditor claim both, the contractual penalty and the statutory (commercial) interest?

wanbetaler-social-media.a3aa9e

Statutory (commercial) interest

Creditors are entitled to statutory (commercial) interest over the period a defaulter is too late making payments. This does not need to be agreed upon in the contract.

The statutory commercial interest applies to commercial agreements. These are business agreements, for instance, between two businesses or between a business and a government body. The statutory interest rate applies to other situations, such as agreements concluded with consumers.

The statutory commercial interest rate is significantly higher than the statutory interest rate. Currently, the statutory commercial interest rate is 8% and the statutory interest rate is 2%. Agreements concluded before 1 December 2002 might be subject to different rules.

Contractual penalty

The parties may choose to include a penalty clause in the contract. Such a clause may stipulate, for instance, that the debtor has to pay the creditor 3% of the amount due for each day he is late making payments.

Contractual penalty substitutes statutory (commercial) interest

Pursuant to the law, a penalty clause substitutes the compensation, including the statutory (commercial) interest. As a consequence, in case of late payment, the creditor in principle cannot claim a contractual penalty plus the statutory (commercial) interest. Also, in case of a penalty clause, it is not possible to opt for the statutory (commercial) interest if this will lead to a higher compensation than the penalty agreed upon, unless this was explicitly included in the agreement.

Derogating by agreement

The parties are free to derogate from this statutory regulation, but they must explicitly agree on this in the contract or the General Terms & Conditions. In practice, the following 3 ways of derogation can be found frequently:

  • Apart from the contractual penalty, compensation (including the statutory (commercial) interest rate) can be claimed.
  • Apart from the contractual penalty additional compensation can be claimed. The frequently used stipulation “without prejudice to the right to additional compensation” (onverminderd het recht op verdere schadevergoeding) falls under this category. If the creditor can prove that the statutory compensation exceeds the contractual penalty, the amount exceeding the penalty can be claimed in addition to the penalty. Thus, only the additional amount exceeding the penalty qualifies for compensation and not the entire statutory compensation.
  • The contractual penalty substitutes one specific kind of damage, when other damage can still be claimed.

Statutory interest on the contractual penalty

The main rule is that the creditor cannot claim both, the contractual penalty and the statutory (commercial) interest rate on the principal sum. However, the creditor may claim statutory interest on the contractual penalty in case the payment is late. This applies to trade agreements as well. However, claiming the statutory commercial interest rate on the contractual penalty is not allowed.

More information

Would you like us to draft a penalty clause or other sanctions on your behalf? Or would you like to learn more about the statutory (commercial) interest rate and contractual penalties? Please contact:

    Share on social media

    • Fashion and luxury
    • Contracts

    Contracts: What to do when your client doesn’t pay?

    13 June 2017

    5 steps you can take when your client doesn’t pay!

    read on
    • IT and ICT
    • Employment law and dismissal

    Uber drivers are employees, not self-employed workers

    14 September 2021

    According to the Amsterdam District Court, Uber drivers are employees. Therefore, they are covered by the collective agreement of the taxi industry with all associated rights and obligations. How did the District Court reach this judgement? And what does it mean for other forms of platform work?

    read on
    • Retail
    • Employment law and dismissal

    Questions and challenges during COVID-19: Dutch employment law, tenancy law and contract law

    13 September 2021

    In this article, we will discuss several questions and challenges in the field of Dutch employment law, tenancy law and contract law during COVID-19.

    read on
    • Retail
    • Real estate and rent

    Calculation of rent reduction due to lockdown

    30 August 2021

    How does the court calculate a lower rent due to the lockdown? Does online turnover count? Does it matter whether the tenant or landlord is large or small?

    read on
    • Corporate law

    Is a management agreement an employment contract or a contract for services?

    26 August 2021

    Do the new rules of the Supreme Court for the assessment of employment contracts also have consequence for management agreements? Case law has not decided yet. This can be seen from the judgments of the Arnhem-Leeuwarden Court of Appeal and the District Court of Midden-Nederland about the management agreement of the CFO of Volksbank.

    read on
    • Franchise, distribution and agency
    • Contracts

    Beware of vague wording in franchise agreements

    24 June 2021

    It is important to use clear and unambiguous language in agreements. This has once again been demonstrated by a recent judgement of the Supreme Court. Because of ambiguities in franchise agreements, franchisees of Albert Heijn may have lost millions.

    read on
    • Expats
    • Employment law and dismissal

    17 June 2021: Employment Webinar “Tricky sickness issues”

    17 June 2021

    If your employee reports sick, this may raise many difficult questions. What are your reintegration obligations during the sick leave period? What are you allowed to record about your sick employee with regard to the privacy legislation? We answered these and other questions during a webinar. Watch the video!

    read on
    • Fashion and luxury
    • Litigation

    The advantages of arbitration

    19 May 2021

    Proceedings do not always have to be in court. There are other ways to resolve legal disputes. An important and often also appealing alternative is arbitration. In particular if you are doing business internationally. What are the advantages of arbitration?

    read on