The implementation date for the new EU Late Payments Directive passed on 16 March 2013. This applies to all contracts which involve the provision of goods or services to any business or public authority.
The rules impose maximum payment terms (60 days in a B2B contract and 30 days in a B2P contract). They limit the scope for contracting out and impose sanctions on those who fail to pay within those periods.
You cannot assume that a contract will be excluded just because:
- It is between two big businesses; or
- It is specifically negotiated; or
- It also deals with other things (shares, real property etc.) as well as services or goods.
The rules must be considered in drafting any contract involving goods or services which have a connection with Europe and in doing due diligence on any entity doing business involving Europe.