Contract Clause Library
Late payment clause
Sets what happens when an invoice isn't paid by its due date — interest charges, late fees, or a right to pause work.
This clause gives an agency real leverage against slow-paying clients: a stated interest rate or flat late fee that accrues automatically past the due date, and often a right to suspend work until the account is brought current. Without it, a late invoice is just an awkward follow-up email with no contractual weight behind it.
Sample wording
Sample language (illustrative, not legal advice)
Any invoice not paid within 30 days of the invoice date will accrue interest at 1.5% per month (or the maximum rate permitted by law, if lower) on the outstanding balance. Vendor reserves the right to suspend work on any active deliverables if an invoice remains unpaid more than 15 days past its due date.
Red flags
- No late fee or interest provision at all, removing any contractual consequence for slow payment
- A suspension-of-work right with no advance notice requirement before work actually stops
- An interest rate that exceeds the legal maximum in the applicable jurisdiction, making the clause unenforceable as written
How MarginFlow reads it
MarginFlow tracks each invoice's due date against this clause's grace period and flags exactly when an unpaid invoice crosses into late-fee or work-suspension territory, so the leverage this clause is supposed to provide actually gets used instead of forgotten.