# Payment Terms Clause

Source: https://contracko.com/clause-library/payment-terms

# Payment Terms Clause

Sets when, how and in what currency invoices are paid, plus interest and remedies for late payment.

## What it is

A payment terms clause specifies invoicing intervals, the payment period (e.g. 30 days net), accepted methods and currency, and the consequences of late or partial payment. It is the financial backbone of any commercial agreement.

## Why it matters

Cash flow depends on predictable, enforceable payment. Clear terms reduce disputes, fix the trigger for statutory commercial interest, and let a creditor act quickly when an invoice goes unpaid.

## How to apply it

- State the net payment period and the precise date interest begins to accrue.
- Reference statutory commercial interest (BW 6:119a) and reasonable collection costs.
- Specify currency, bank details, and whether amounts are exclusive of VAT.
- Limit any right to set off or withhold payment to undisputed amounts.

## Sample wording

> Invoices are payable within thirty (30) days of the invoice date. Overdue amounts bear statutory commercial interest from the due date until payment in full, without further notice of default.

## Negotiation tips

- • Push for milestone or up-front payments to cut your working-capital exposure.
- • Tie any prompt-payment discount to a clearly defined early-payment window.

## Common pitfalls

- • Leaving the late-payment consequence vague, so the interest start date is contestable.
- • Allowing broad set-off rights that let the debtor freeze payment over minor disputes.

### How Contracko helps

Contracko stores all your contracts in one searchable repository so you can instantly find which agreements contain specific payment terms or outstanding obligations. Its AI review flags missing due-date triggers and interest provisions before you sign. Upcoming payment milestones and overdue-notice deadlines are tracked with automated reminders so your team never misses a collection window.

## Legal references

- [BW 6:119a Statutory commercial interest Dutch law](https://wetten.overheid.nl/BWBR0005289)
- [BW 6:74 Damages for non-performance Dutch law](https://wetten.overheid.nl/BWBR0005289)

Unless marked otherwise, references are to Dutch law (Burgerlijk Wetboek, the Dutch Civil Code); EU instruments such as the GDPR apply across the EU. This is general information, not legal advice. Other jurisdictions treat these concepts differently. Verify the current text and your situation with a qualified lawyer.

## Relevant for

[Software & SaaS](https://contracko.com/industries/software-saas)[Consulting](https://contracko.com/industries/consulting)[Construction](https://contracko.com/industries/construction-industry)[Logistics & Distribution](https://contracko.com/industries/logistics)[Manufacturing](https://contracko.com/industries/manufacturing)

## Related clauses

- [Price Indexation Clause](https://contracko.com/clause-library/price-indexation)
- [Liquidated Damages Clause](https://contracko.com/clause-library/liquidated-damages)
- [Termination for Cause Clause](https://contracko.com/clause-library/termination-for-cause)

## Related terms

- [Breach of contract](https://contracko.com/glossary/breach-of-contract)
- [Liability](https://contracko.com/glossary/liability)
- [Consideration](https://contracko.com/glossary/consideration)

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## Frequently asked questions

Common questions about this clause.

- **Q:** When does statutory commercial interest start in the Netherlands?
  **A:** For B2B contracts, interest under BW 6:119a runs automatically from the agreed due date; no separate notice of default is required.

- **Q:** Can a customer withhold payment because of a dispute?
  **A:** Only proportionately and in good faith; a well-drafted clause limits suspension and set-off to undisputed amounts.

- **Q:** What is the standard payment period in a Dutch B2B contract?
  **A:** The Late Payment Directive default is 30 days; contracts may agree longer periods up to 60 days, but beyond that extra conditions apply.

- **Q:** Are collection costs recoverable on a late invoice?
  **A:** Yes. For B2B contracts BW 6:96 and the Besluit vergoeding voor buitengerechtelijke incassokosten allow recovery of reasonable extrajudicial collection costs.

- **Q:** Can VAT and other taxes be included in the invoiced amount?
  **A:** That depends on what the contract says. Always state explicitly whether prices are exclusive or inclusive of VAT to avoid disputes on every invoice.

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