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On May 1st, 2000, a new German law came into effect concerning the acceleration of outstanding payments. The law affects the default conditions for money claims and makes default of payment economically unattractive. As a result, it is easier to assert outstanding payment claims more quickly. Please note the new regulations:
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| New conditions for money claims |
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Until May 2000, debtors were only in default (in addition to cases involving special agreements) when a reminder payment deadline was determined or a special due date was determined.
According to the new law, a debtor is generally in
default 30 days following the payment due date or receipt of an invoice or
an equivalent demand note. In the case of claims from recurrent cash
benefits, the default is still determined according to a calendar due date.
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| Increased default interest |
| Default interest increases from formerly 4 % per year to 5 % over the prime rate. If the current prime rate is 2.,5 %, then default interest would be 7.5 % per year. |
| Changes in the law on contracts for services |
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These are the main changes in the law on contracts for services:
Instead of acceptance, an independent expert can compile a document list of all noted defects. The service provider can assert a claim only after all defects are removed. |
| Taking effect and temporary regulations |
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The
regulations above came into effect on May 1st, 2000. The new regulations on amounts of the default interest are only valid for claims that are valid starting May 5th, 2000. |
All information is presented to the best of our knowledge. We assume no responsibility for its correctness! |
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