Search
Contact
02.09.2016 | KPMG Law Insights

Corporate Law, Company Law – Act to Combat Late Payment in Business Transactions

Act to Combat Late Payments in Business Transactions

On July 29, 2014, the Act on Combating Late Payments in Business Transactions came into force. The aim of the law is to improve the payment practices of private companies and public-sector clients in order to strengthen the liquidity and competitiveness of market players. The new legal regulations require a timely review and adjustment of general terms and conditions and individual contractual agreements.

The Act to Combat Late Payments in Business Transactions contains significant new regulations that considerably restrict contractual autonomy. Payment, inspection and acceptance deadlines can no longer be agreed at will. In addition, the statutory default interest rate was increased and a flat rate for default damages was introduced.

Maximum limits for payment, inspection and acceptance deadlines

Individual contractual agreements that provide for a longer payment period than 60 days after receipt of the consideration, or the subsequent receipt of an invoice or equivalent payment schedule, are invalid. Something else can only be considered if the parties have expressly agreed on the longer payment period and this appears reasonable to the creditor.

If a claim for payment is to be fulfilled only after verification or acceptance of the consideration, an individual contractual agreement shall only be effective if it has been expressly made and is justified with regard to the interests of the creditor.

Payment periods in the general terms and conditions

Stricter standards apply to the agreement of payment periods in the general terms and conditions: Accordingly, an agreement by which the user reserves an “unreasonably long time” for the fulfillment of a payment claim is already invalid. If the user is not a consumer, it must be assumed in case of doubt that a period of more than 30 days is unreasonably long.

The same applies if the user of GTCs reserves the right to fulfill a claim for payment of the contractual partner only after an “unreasonably long period of time”. If the user is not a consumer, a period of more than 15 days after receipt is already unreasonably long.

Special rules apply to public-sector customers: In principle, they may only allow payment periods of a maximum of 30 days after receipt under individual contracts. Longer periods are only effective if the agreement has been expressly made and is objectively justified. The maximum permissible period is 60 days – this maximum limit cannot be replaced.

Increase of the default interest rate

The default interest rate for legal transactions not involving a consumer has been increased from the original eight to nine percentage points above the prime rate.

An agreement made in advance in business transactions, according to which the claim for payment of interest on arrears is completely excluded, is invalid. A limitation of the claim for default interest shall only be invalid if it is unreasonable for the creditor.

Liquidated damages

If the debtor is in default of payment, the creditor is entitled to reimbursement of the so-called recovery costs. What is new is that the creditor is now entitled to payment of a lump sum of EUR 40. The claim to this arises irrespective of whether and in what amount the creditor has suffered damage. Consumers may not be debtors but may be creditors of this claim.

An agreement made between the parties which excludes or limits the creditor’s claim to the lump sum shall also be invalid if it appears unreasonable for the creditor. The agreement of the complete exclusion of the lump sum or the reimbursement of the legal costs shall be considered as not justified in case of doubt. These provisions do not apply if a consumer is the debtor of the claim.

The new regulations only apply to contractual obligations entered into after July 28, 2014. An exception applies to continuing obligations. If the consideration under a continuing obligation is not provided until after June 30, 2016, the new provisions also apply if the continuing obligation existed before the Act came into force.

Consequences for debtors

If contractually agreed provisions on the obligation to pay, inspect or accept are invalid due to infringement of the new provisions, this may have adverse consequences for the debtor: If, for example, an agreed payment deadline is invalid, the statutory provisions shall apply. The service owed shall then become due immediately. If the transaction is a commercial transaction, the creditor is entitled to interest on the due date at a rate of 5%.

In addition, a claim for payment of default interest in the amount of 9% shall arise within 30 days after the due date and receipt of the invoice. Upon the occurrence of the default in payment, the creditor shall then also be entitled to payment of the newly introduced lump sum in the amount of EUR 40.00, namely on account of each installment payment or other installment payment with which the debtor is in default.

Finally, in the event of a violation of the new regulations, warnings and injunctions may generally be threatened. Individual contractual provisions and general terms and conditions, in particular general terms and conditions of purchase, which fall under the scope of the new regulations should therefore be reviewed promptly and adapted if necessary.

Explore #more

09.10.2026 | KPMG Law Insights

Claims Management for Cyber Incidents: How Insurers Actively Manage Claims

Cyber incidents are among the most complex claims scenarios for insurers. Ransomware attacks, in particular, can paralyze entire IT infrastructures—with enormous financial consequences. Insurers for …

08.10.2026 | In the media

KPMG Law Guest Column in AUTOHAUS: Consumer Credit Directive: Sales Under New Circumstances

Car dealerships should use the time remaining before the new Consumer Credit Directive takes effect to systematically review their financing and sales processes for regulatory…

08.10.2026 | In the media

KPMG Law Interview with HAUFE: Even If AI Makes a Mistake, the Board of Directors Is Still Liable

AI analyzes, makes recommendations, and helps make decisions. But who bears the consequences if it’s wrong? KPMG Law experts Nikolaus Vincent Manthey and Sabrina Riesenbeck…

30.09.2026 | KPMG Law Insights

Mixed-Use Real Estate as an Opportunity for Downtown Areas

Downtown areas should be vibrant, sustainable, and attractive. But the traditional business model behind them—retail—is becoming less and less viable. Rents are high, customers are…

28.09.2026 | Deal Notifications

KPMG Law and KPMG are advising Rohde & Schwarz on the acquisitions of NEOSAT and PHYTRONIC

KPMG Law Rechtsanwaltsgesellschaft mbH (KPMG Law) and KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG) advised the Munich-based technology group Rohde & Schwarz on its acquisitions of NEOSAT GmbH…

28.09.2026 | Deal Notifications

KPMG Law and KPMG are advising Diehl Defence on the acquisition of the Dr. Carls aerial imagery database

KPMG Law Rechtsanwaltsgesellschaft mbH (KPMG Law) and KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG) advised Diehl Defence on its acquisition of the aerial imagery database Dr. Carls GmbH.…

26.09.2026 | In the media

Op-Ed in *Lebensmittelzeitung*: PPWR Introduces New Requirements for the Food Industry

The EU Packaging Regulation (PPWR) has been in effect since August 12, 2026—and presents companies in the food industry with a question that requires urgent…

18.09.2026 | Press releases

KPMG Law Honored at the PMN Management Awards

KPMG Law was awarded first place in the Business Development category at this year’s PMN Management Awards. In addition, the project “The Agent-Based Law Firm”…

18.09.2026 | KPMG Law Insights

How the Data Act Affects the Drafting of Lease Agreements

The EU Data Act is also of great significance to the real estate industry, as modern commercial properties have become data spaces. Heating and air…

15.09.2026 | KPMG Law Insights

Reporting Deadlines for Cyber Incidents Under the GDPR, BSIG, and CRA—Every Hour Counts

After a cyber incident, companies have only 24 or 72 hours to file their initial report with the authorities. A single incident can trigger multiple…

Contact

Dr. Konstantin von Busekist

Partner
Global Head of Legal Services

Tersteegenstraße 19-23
40474 Düsseldorf

Tel.: +49 211 4155597123
kvonbusekist@kpmg-law.com

© 2026 KPMG Law Rechtsanwaltsgesellschaft mbH, associated with KPMG AG Wirtschaftsprüfungsgesellschaft, a public limited company under German law and a member of the global KPMG organisation of independent member firms affiliated with KPMG International Limited, a Private English Company Limited by Guarantee. All rights reserved. For more details on the structure of KPMG’s global organisation, please visit https://home.kpmg/governance.

KPMG International does not provide services to clients. No member firm is authorised to bind or contract KPMG International or any other member firm to any third party, just as KPMG International is not authorised to bind or contract any other member firm.

Scroll