When a debtor fails to pay on time, a creditor may well face cash flow problems and be required to take out loans to bridge this difficult period. If this is not the case, the creditor may miss out on investment opportunities and the money may not generate additional revenue. These are just a few examples of how an unpaid invoice can cause additional damage. It is therefore only fair that the debtor bears the cost of that damage. For this reason, the Civil Code provides for the payment of statutory commercial interest.
The statutory commercial interest rate is higher than the statutory interest rate
Statutory commercial interest is payable by the debtor when he defaults on his obligation to pay a sum of money in the context of a commercial transaction. The creditor may then demand not only payment of the principal amount, but also payment of the interest accruing on top of it.
It is difficult, if not impossible, to determine the extent of the damage caused by non-payment. Therefore, the Civil Code opts for fixed damages. This means that the creditor does not have to prove their damages but only needs to refer to the statutory commercial interest rate applicable at that time.
The percentage of the statutory commercial interest rate is not fixed in the Civil Code. Ultimately, much depends on current market developments and market interest rates. Therefore, the rate is always fixed for a specific period and adjusted if necessary. Currently, for example, a statutory commercial interest rate of 8%, which is significantly higher than the statutory rate for non-commercial transactions (2%).
To be applied only to commercial transactions
The higher statutory commercial interest rate applies only to commercial transactions and, for example, not to sales to consumers. However, the question of what constitutes a commercial transaction and where the boundary lies has frequently been raised in the past. A good example of this is a case from 2017 (ECLI:NL:GHSHE:2017:4326) in which a contractor was required to construct a building that would be used both as a residence and as a pig farm. The Court of Appeal in 's-Hertogenbosch indicated at the time that for a commercial transaction to exist, there must be an agreement for consideration regarding the supply of goods or services and that the organization must act within the framework of an independent economic or professional activity. Because the client consistently communicated on the letterhead of the pig farm and the construction contract clearly referred to the construction of real estate where a pig farm would be operated, the Court of Appeal ruled that a commercial transaction was indeed involved. Consequently, the higher statutory commercial interest rate applied.
In a new case (ECLI:NL:HR:2020:1710), the Supreme Court had to rule on the application of commercial interest to an undue payment, specifically when a trading partner overpaid for one reason or another and the counterparty only repays it much later. According to the Supreme Court, it does not apply here, and statutory commercial interest applies only to the primary payment obligation that follows directly from the commercial agreement, namely as consideration for the supply of services or goods. For this reason, charging commercial interest on compensation for damages following the dissolution of the commercial agreement is not permitted.
Other agreements in the contract
Businesses have no influence on the statutory commercial interest rate. Fortunately, other agreements can be made, such as penalty clauses to punish contractual breaches or a contractual interest rate separate from the commercial interest rate. MKB Juristen is happy to assist you with this.
