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"Service Charge"Distinguished From "Interest" Interest

Monday, December 02, 2002 11:42 am

 
"Service Charge"Distinguished From "Interest" Interest

An Indiana court has ruled that a 2.5 percent per month "service charge"was a financial disincentive to late payment, not "interest"which might have been subject to a statutory rate.

Roy A. Miller & Sons, Inc. was the prime contractor for construction of improvements to a facility owned by Industrial Hardwoods Corporation. Miller subcontracted the roofing work to Len Eckstein Roofing, Inc.

Eckstein submitted invoices which stated: "Two and one-half percent service charge after tenth of the following month."Miller paid several invoices without objecting to this language. Subsequent invoices went unpaid after [...]

 
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