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Hi Mike
I am confused as to in what situations you can claim BOTH interest and damages?
Thanks
Why?
If someone breaches a contract with me and I therefore am out of funds, is it not reasonable that I should be able to sue for the lost profits and for interest that I could have earned (or that I could have avoided on the overdraft)
I’m not aware of any particular rules thatapplybto the collectibility / claim ability of interest. Are you?
In the example that I am looking it at it says:
Where a buyer is late in paying for the goods under a contract, the seller may claim interest on the overdue amount at the statutory rate. Fair enough.
It then says:
This does not prejudice any extra claim for damages.
This means that you can also be paid for damages but in this instance how would you put a price on it? Other examples I have looked at have involved actual products e.g. broken bottles of which the cost of the bottles would be paid dependent on the carriage arrangements in terms of who was liable.
If the buyer is late for payment but has actually paid in the end and you are claiming interest on the time that was overdue what are the damages? Does it come down to the inconvenience and say if you went into an overdraft due to the funds not coming into the bank account at the specific time it should have done?
Say that you’ve agreed to pay your own supplier by a specified date and your customer knows this and knows that you are dependent upon the customer’s money being available to settle your own debt, and then your customer delays payment to you so your supplier isn’t paid on time and then and then and then
Can you see that damages could be payable then?
In theory I can understand what you mean in. In reality, this happens all of the time in business and I cannot see that damages are claimed every time a customer pays late? You would also have to prove that you couldn’t settle your own debt because of it.
Agreed – but you also have to remember that, although companies often work under “strict settlement terms” it’s not unusual (at least in my experience) that that credit period is extended. And you’re right – this rarely leads to legal action for interest and even rarer for damages
Yes, understood, so although it doesn’t happen often in practice, in terms of our studies we need to address that it could happen.
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