Late payment interest - do contractual terms prevent charging it?

[ladymuck]

I'm on 45 day, paid when the consultancy is paid terms.

The client is being cheeky and delaying payment. The reason is not to do with a lack of cash.

Can I charge late payment interest for exceeding the 45 day part of the terms, even though the contract says I'll only get paid when the consultancy is paid?

To be fair to the consultancy, they're keeping all us contractors in the loop about the efforts they're going to to get the money out of the client. It's more of a thought experiment at the moment.

[Lance]

I suppose it all depends on what is considered "late". If it's only late after the client is paid then you cannot claim interest.
I would go over the whole contract to see what is in there around payment terms. There are likely more clauses than 'pay when we are paid'.

[ladymuck]

I will have a more thorough read through later. I just thought it an interesting angle that the payment can't be late to myCo if the client hasn't made the payment yet.

[SueEllen]

Can your client pass on the late payment interest to their client?

If they can then charge them late payment interest.

[ladymuck]

So I have two main areas relating to payment terms:

Framework agreement says:
ConsultancyCo shall pay all sums properly due and payable to the Subcontractor in cleared funds within the time period specified in Assignment Order. If no time is specified, it will be 30 working days from receipt of payment for the work from ConsultancyCo's client.

Assignment order says:
Payment to be 45 days after submission of approved timesheet and relevant contractor invoice.

To me, that means the AO trumps the FA regarding terms and late payment interest could be applied.

[SueEllen]

Looks like you can charge it then.