Late fee clause: Copy, customize, and use instantly
Introduction
A late fee clause establishes the penalties for failing to make payment by the agreed-upon due date. It sets the rate at which a late fee will be assessed, how it will be applied, and any conditions under which it may be waived. This clause ensures that the paying party is incentivized to adhere to the payment schedule and protects the party receiving payment from the financial impact of delays.
Below are templates for late fee clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Standard late fee clause
This version sets a fixed late fee.
If payment is not received by the due date, a late fee of [X] dollars will be applied to the outstanding balance. The fee will be due immediately and added to the total amount owed.
Late fee clause with percentage-based fee
This version applies a percentage-based late fee.
If payment is delayed for more than [X] days, a late fee of [X]% of the overdue balance will be added to the outstanding amount. This fee will be compounded monthly on the remaining balance until paid in full.
Late fee clause with provision for maximum cap
This version applies a capped late fee.
In the event of delayed payment, a late fee of [X]% of the overdue balance will be charged per month. However, the total late fees will not exceed [Y] dollars regardless of the overdue amount.
Late fee clause with escalating fee
This version escalates the fee after a certain period.
If payment is delayed for more than [X] days, a late fee of [X] dollars will be applied to the overdue amount. After [Y] days, the late fee will increase to [Z] dollars per day until the payment is made in full.
Late fee clause with a grace period
This version allows for a grace period.
[Party B] will be granted a grace period of [X] days beyond the due date to make payment without incurring any late fee. After the grace period, a late fee of [X] dollars will be charged for every [X] days the payment remains overdue.
Late fee clause with provision for compounded interest
This version includes compounded interest.
If payment is not made within [X] days of the due date, a late fee of [X]% of the overdue balance will be applied, compounded monthly, until the outstanding amount is paid in full.
Late fee clause with a flat daily fee
This version applies a daily flat fee.
In the event of delayed payment, a flat late fee of [X] dollars per day will be charged for each day the payment is overdue, starting from the due date until the overdue balance is paid.
Late fee clause with a fixed monthly fee
This version applies a fixed monthly late fee.
If payment is not received by the due date, a fixed late fee of [X] dollars will be charged for each month the payment is overdue. The fee will be added to the total balance and payable immediately.
Late fee clause with provision for automatic application of fees
This version applies late fees automatically.
If the payment is overdue for more than [X] days, a late fee of [X]% of the outstanding balance will be automatically added to the overdue amount. This fee will be applied each month until the balance is paid in full.
Late fee clause with provision for a one-time fee
This version applies a one-time fee.
If payment is delayed for more than [X] days, a one-time late fee of [X] dollars will be charged. No further late fees will apply unless the payment remains overdue for an additional [Y] days.
Late fee clause with provision for discounted late fee
This version offers a discount for early settlement after delay.
If payment is made within [X] days of the original due date, a discounted late fee of [X] dollars will apply. If payment is not made within this period, the full late fee of [Y] dollars will be charged.
Late fee clause with provision for accumulated fee
This version accumulates the fee based on overdue time.
Late fees will accumulate at a rate of [X] dollars per day for each day payment is overdue. The accumulated late fees will be added to the total amount owed, and the full balance must be paid within [X] days of the due date.
Late fee clause with provision for non-payment after extended delay
This version applies when payment is delayed for an extended period.
If payment is delayed for more than [X] days, [Party A] reserves the right to apply a late fee of [X]% per month on the overdue amount. If payment is delayed for more than [Y] days, the full overdue amount, including late fees, will become immediately due.
Late fee clause with provision for adjustment based on outstanding balance
This version adjusts based on the balance.
If payment is overdue for more than [X] days, the late fee will be calculated at [X]% of the outstanding balance. The fee will be adjusted if the outstanding balance changes due to partial payments.
Late fee clause with provision for waived fee if paid within grace period
This version offers a grace period with waived fees.
No late fee will be charged if the overdue balance is paid within [X] days from the due date. After the grace period, a late fee of [X]% will be applied to the overdue amount.
Late fee clause with provision for interest on late fees
This version applies interest to late fees.
If a late fee is incurred, interest will accrue on the late fee itself at a rate of [X]% per annum. This interest will be applied to the total amount due, including the original late fee.
Late fee clause with provision for prorated late fee
This version prorates the late fee.
If payment is delayed, the late fee will be prorated based on the number of days the payment is overdue. The fee will be calculated at [X] dollars per day, up to a maximum of [Y] dollars for each overdue period.
Late fee clause with provision for fee adjustment after renegotiation
This version adjusts the fee after renegotiation.
If payment is overdue and [Party B] requests a renegotiation of the payment terms, the late fee may be reduced or adjusted based on the new terms agreed upon by both Parties.
Late fee clause with provision for increasing fee after missed payments
This version increases the fee after missed payments.
If payment is missed for two consecutive periods, the late fee will increase to [X] dollars per day. The fee will continue to increase after each subsequent missed payment, up to a maximum of [Y] dollars per day.
Late fee clause with provision for waiver in case of good standing
This version waives the fee for good standing.
[Party A] agrees to waive any late fees if [Party B] has a history of timely payments and the current delay is an isolated incident. This waiver will apply only after a discussion of the delay and mutual agreement.
Late fee clause with provision for fee adjustment based on account status
This version adjusts the fee based on account status.
If [Party B] has an active account in good standing with no overdue balances, late fees for delayed payments will be charged at a reduced rate of [X]% of the overdue balance. If the account has previous overdue balances, the standard late fee of [Y]% will apply.
Late fee clause with provision for suspension of late fee if dispute exists
This version suspends fees during disputes.
If there is a dispute over the amount owed, [Party A] agrees to suspend the late fee until the dispute is resolved. Once the dispute is resolved, any late fees accrued during the dispute period will be applied to the overdue balance.
Late fee clause with provision for waiving fee upon early settlement
This version waives the fee for early settlement.
If payment is made in full before the due date, no late fee will apply. If payment is delayed, the late fee will be [X] dollars per [X] days, starting from the original due date.
Late fee clause with provision for additional charges for repeated delays
This version includes charges for repeated delays.
If payment is delayed more than [X] times within a [X]-month period, an additional fee of [X] dollars will be charged for each subsequent delay, in addition to the standard late fee.
Late fee clause with provision for daily fee
This version applies a daily late fee.
If payment is overdue for more than [X] days, a late fee of [X] dollars per day will be applied to the outstanding balance, beginning from the due date until the full payment is made.
Late fee clause with provision for grace period and penalty fee
This version allows a grace period before a penalty is applied.
[Party B] will be granted a grace period of [X] days after the due date to make payment without penalty. After the grace period, a late fee of [X] dollars will be charged for each additional [X] days the payment is overdue.
Late fee clause with provision for one-time penalty
This version applies a one-time penalty.
In the event of delayed payment, a one-time penalty of [X] dollars will be assessed. No further penalties will be imposed unless payment remains overdue for more than [Y] additional days.
Late fee clause with provision for fee reduction upon early payment
This version reduces the fee for early payment after a delay.
If [Party B] pays the overdue balance within [X] days after the due date, a reduced late fee of [X]% of the overdue balance will be applied. If payment is made after this period, the standard late fee will apply.
Late fee clause with provision for payment through installment after delay
This version allows installment payments after a delay.
If the payment is overdue, [Party B] may choose to pay the overdue balance in [X] equal installments. A late fee of [X]% of the total overdue amount will be applied to the first installment.
Late fee clause with provision for escalating fees
This version escalates fees for ongoing delays.
If payment remains overdue for more than [X] days, the late fee will escalate by [X]% for each additional [X] days. The fee will continue to increase until the balance is paid in full.
Late fee clause with provision for suspension of privileges
This version suspends privileges due to delay.
If payment is delayed by more than [X] days, [Party A] reserves the right to suspend any privileges, services, or rights granted under this Agreement until the overdue balance is paid in full, including any accrued late fees.
Late fee clause with provision for fixed minimum late fee
This version includes a fixed minimum fee.
If any payment is overdue, a minimum late fee of [X] dollars will be applied to the outstanding balance, regardless of the overdue amount. This fee will apply even if the overdue balance is below the specified threshold.
Late fee clause with provision for partial payment adjustment
This version adjusts the late fee for partial payments.
If a partial payment is made, the late fee will be reduced proportionally based on the amount paid. The remaining balance will continue to accrue the late fee until it is fully paid.
Late fee clause with provision for automatic fee addition
This version applies an automatic fee addition.
A late fee of [X] dollars will be automatically added to the outstanding balance for every [X] day period the payment remains overdue. This process will continue until the balance is settled.
Late fee clause with provision for waiver due to payment delay due to force majeure
This version waives fees in force majeure situations.
If the payment delay is caused by an event of force majeure, [Party A] agrees to waive any late fees during the period of the event, provided that [Party B] notifies [Party A] within [X] days.
Late fee clause with provision for extension due to financial hardship
This version offers an extension for financial hardship.
If [Party B] is facing financial hardship, they may request an extension of up to [X] days to make the overdue payment without incurring a late fee. This extension must be agreed upon in writing by both Parties.
Late fee clause with provision for percentage-based penalty
This version applies a percentage-based late fee.
If any payment remains overdue for more than [X] days, a penalty of [X]% of the overdue balance will be applied to the total balance, in addition to any previously accrued interest.
Late fee clause with provision for fee based on overdue amount
This version sets fees based on the overdue amount.
A late fee will be charged at a rate of [X] dollars for every [X] amount of overdue balance. For example, if the overdue balance exceeds [X] dollars, the late fee will be [Y] dollars.
Late fee clause with provision for adjusting due date
This version allows for adjusting the due date due to delays.
If payment is delayed, the due date may be adjusted by [X] days without penalty. After this extension, any overdue balance will incur a late fee of [X]% of the outstanding amount per [X] days overdue.
Late fee clause with provision for additional administrative costs
This version applies administrative costs.
If payment is delayed, an administrative fee of [X] dollars will be added to the overdue balance. This fee is in addition to any accrued interest or penalties on the overdue balance.
Late fee clause with provision for delayed fee notification
This version requires notification of late fees.
[Party A] will notify [Party B] in writing of any overdue amounts and the applicable late fees. The late fee will be added to the overdue balance once the notification has been received by [Party B].
Late fee clause with provision for capped fees
This version applies a capped late fee.
The total late fees applicable under this Agreement shall not exceed [X]% of the original amount due, regardless of the length of the delay or the number of overdue periods.
Late fee clause with provision for non-refundable late fee
This version applies a non-refundable late fee.
Any late fee charged under this Agreement is non-refundable, even if the overdue balance is paid in full within a period after the fee has been applied. The fee will not be refunded or reduced under any circumstances.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.