Businesses and Individuals Interest Provision

Last month I blogged to remind businesses and individuals to write in an attorney's fee provision in all of their contracts, so that if there is a need to hire an attorney, then the fees would be recoverable along with the principal due in the contract.  Another issue that goes hand in hand with an attorney's fee provision is an interest provision.  Unless an interest provision is included in a contract, interest will not be recoverable until after there is a judgment.  There are some exceptions for fraud and consumer matters, but the general rule is that pre-judgment interest is not recoverable along with the principal amount unless the contract so provides.  The legal rate of interest is 10% per annum.  At a minimum, an interest provision should be in all your contracts, along with an attorney's fee provision.  That way, businesses and individuals will not lose money in time and collection efforts, giving you more time and money to focus on building your business.

Article Submitted By: Attorney Min N. Thai