On 10 May, Decree-Law No. 62/2013 was published; this Decree-Law transposes into Portuguese law Directive 2011/7/EU of the European Parliament and of the Council of 16 February 2011 establishing measures to combat late payment in commercial transactions. The purpose of the Decree-Law in question is to discourage late payment in commercial transactions, as these late payments significantly affect liquidity and complicate the financial management of undertakings (in particular small and medium sized enterprises), in particular in the current period of recession, when access to financing is significantly more difficult.
The legislation under consideration applies to all payments made as remuneration for commercial transactions, which are deemed to be the "transactions between undertakings and public authorities which lead to the delivery of goods or the provision of services for remuneration".
The scope of application of Decree-Law No. 62/2013, of 10 May does not include (i) contracts entered into with consumers, (ii) interest in connection with payments other than those made as remuneration for commercial transactions and (iii) payments made as compensation for damages including payments from insurance companies. The arrangements provided for in this legislation are also not applicable to the granting of bank loans, which are the subject of special legislation.
- Payment periods
In accordance with Decree-Law No. 62/2013, of 10 May, payment periods in contracts between undertakings (that is, between entities that are not public entities and pursue an autonomous economic or professional activity, including individuals), should not exceed 60 days, without prejudice to the parties being free to set a longer period. However, no longer period will not be admitted that amounts to a clear abuse against the creditor, in which case the corresponding clause shall be prohibited and can be declared null and void.
In the case of contracts establishing commercial transactions between undertakings and public authorities, payment periods should not exceed 30 days, although longer periods may be agreed by the parties provided (i) it is objectively justified in light of the particular nature or features of the contract or (ii) in the case of public authorities providing health services; however payment periods shall not under any circumstance exceed 60 days.
The payment periods set above should not prevent, however, the possibility of the parties agreeing on payment by instalments, in which case, should the payment of any of the instalments be in delay, the interest and compensation provided for shall be calculated on the basis of overdue amounts, in accordance with the applicable legal framework.
- Minimum rate of legal interest for late payment
The legislation under consideration sets out the interest applicable to cases of late payment, which covers any situation of non-payment of the amount due within the contract or statutory period, where the creditor has complied with his obligations, unless the delay is not attributable to the debtor.
In case of late payment, the creditor is entitled to be paid interest for late payment without the need for any formal request from the date following the payment date or from the end of the payment period set out in the contract, it being understood that, where no arrangement is made in the contract by the undertakings concerning the payment date or period, interest for late payment is due at the end of a 30-day period:
- From the date on which the debtor received the invoice;
- From the date the goods or services are actually received where the date of receipt of the invoice is uncertain or where the debtor receives the invoice before the supply of goods or the provision of services;
- From the date of acceptance or verification, where an acceptance or verification procedure by which the conformity of the goods or services with the contract is to be ascertained is provided for by statute or in the contract and the debtor receives the invoice on the date of the acceptance or verification or on an earlier date.
In transactions between undertakings and public authorities, in case of late payment by the latter, the creditor is entitled to statutory interest for late payment set out in the Commercial Code for the period of that delay, without the need for a formal request.
With regard to this subject, this Decree-Law also amends article 102 of the Commercial Code, whereby, in commercial transactions subject to this Decree-Law, the rate of interest for late payment cannot be less than the interest rate applied by the European Central Bank in its last refinancing operation conducted from the first day of January or July, depending of the then current date falling within, respectively, the first or second six-month period of the year, plus eight percentage points.
- Recovery costs
In accordance with this Decree-Law, the creditor is entitled as compensation for recovery costs to a minimum sum of EUR 40.00 (in addition to the interest for late payment already due), without the need for a formal request, without prejudice to the possibility of providing evidence that he incurred in a reasonable amount of higher costs (in particular lawyers’ and paralegals’ fees), and claiming for a higher compensation accordingly.
- Unfair contractual terms and practices
In accordance with this Decree-Law contractual terms or commercial practices relating to the payment date or period, the interest rate for late payment or the compensation for recovery costs that are grossly unfair to the creditor, are null and void.
Contractual terms or commercial practices that exclude interest for late payment or compensation for recovery costs or that establish excessive payment periods or directly or indirectly exclude or limit liability for late payment without a justifiable reason, are also prohibited and will be held null and void.
In determining whether a contractual term or commercial practice is grossly unfair, account must be taken of any gross deviation from good commercial practice, contrary to good faith, the nature of the products or services and whether the debtor has any objective reason not to observe the statutory rate of interest for late payment.
Any delay in the payment entitles the creditor to resort to an injunction, regardless of the value of the debt.
- Application of the law in time
This Decree-Law applies to contracts entered into from its effective date (that is, from 1 July 2013), except in the case of:
- Conclusion or renewal of public contracts resulting from formation processes initiated prior to its effective date and the performance of contracts with an administrative nature concluded following formation processes prior to that date, or
- Express or tacit extensions of the period established to tender the performance, which are the object of public contracts, where the corresponding procedure was initiated prior to 1 July 2013.
The provisions of this Decree-Law will not apply to public authorities forming part of the National Health Service until 31 December 2015, unless the creditor is a micro enterprise or a small undertaking the by-laws of which have been certified by IAPMEI.