Common use of INTEREST CLAUSE Clause in Contracts

INTEREST CLAUSE. It is legally and ethically proper to charge interest on fees. If the attorney elects to do so, this clause provides appropriate language. Please keep in mind that interest, if charged, must be reasonable so as not to violate either the prohibition against unconscionable fees nor the usury provisions of the California Constitution. It must be simple interest, made a part of the agreement, and separately stated as an increment on the monthly or other periodic billing. Generally, interest should begin running only after a certain specified period, i.e., thirty, sixty or ninety days after the billing invoice is rendered, if not paid within that time. If the Agreement uses the terms “finance charges,” “late fees,” “penalty payment” or anything other than simple interest, this may create problems with the Federal Truth In Lending Law and the California Xxxxx Act.

INTEREST CLAUSE. It is legally and ethically proper to charge interest on fees. If the attorney elects to do so, this clause provides appropriate language. Please keep in mind that interest, if charged, must be reasonable so as not to violate either the prohibition against unconscionable fees nor the usury provisions of the California Constitution. It must be simple interest, made a part of the agreement, and separately stated as an increment on the monthly or other periodic billing. Generally, interest should begin running only after a certain specified period, i.e., thirty, sixty or ninety days after the billing invoice is rendered, if not paid within that time. If the Agreement uses the terms “"finance charges,” “" "late fees,” “" "penalty payment” " or anything other than simple interest, this may create problems with the Federal Truth In Lending Law law and the California Xxxxx Act.