New laws on dunning procedure  

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:

[Image] New conditions for money claims
[Image] Increased default interest
[Image] Changes in the law on contracts for services
[Image] Taking effect and temporary regulations


New conditions for money claims

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.

[Image] Information on maturity and default

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.

For former conditions for money claims are to be in effect, a special contractual agreement must be in place. Similar regulations within a company’s general terms and conditions or consumer contracts are not affected by the new law. 


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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.

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Changes in the law on contracts for services

These are the main changes in the law on contracts for services:

  • The service provider has a legal right to future payments for contract performance in part
  • Customer refusal of acceptance is only possible by citing major defects  

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.  

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Taking effect and temporary regulations

The regulations above came into effect on May 1st, 2000. 

The new conditions for money claims are also valid for money claims arising prior to May 1st 2000. However, new default conditions are not valid for claims involving invoices delivered before 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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