CLAUSE: An invoice for Group charges will be forwarded to Group within thirty (30) days after Group departure. Payment is due within 30 days of invoice date. Any unpaid balance will be subject to 1.5 percent interest charge per month.
EFFECT: What this standard clause doesn't take into effect is charges that might be disputed — either because attrition is due and there is some dispute about calculation or mitigation, or because there are items on the invoice that shouldn't be there. Both of these are common occurrences. If the group doesn't pay the disputed charges, the language in this clause would seem to indicate that interest will accrue on those unpaid charges.
Although many hotels will, by practice, not charge interest on disputed charges until the dispute is resolved, it is advisable to spell this out in the contract. Better language for this clause would state that undisputed charges are due within 30 days and that no interest is due on disputed charges until 30 days after the dispute is resolved.
Tyra W. Hilliard, Esq., CMP, is an educator, consultant, and attorney on legal, risk management, and ethical issues. Her consulting and law practice focuses on representing associations, nonprofits, and independent meeting and event professionals. Her Web site is www.tyrahilliard.com and she can be reached by e-mail at tyra.hilliard@gmail.com.
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