The text of the new Directive on Late Payment in Commercial Transactions was approved in October 2010 and was published in the Official Journal of the European Union on February 2011, and came into force on the 16th March 2011. Member states, of which we are one, will have until the 16th March 2013 to implement the Directive in domestic law.
The purpose of the Directive is to encourage prompt payment of invoices as many company’s suffer with cash flow problems relating to late payment for goods and services provided.
The new Directive limits payment terms to 30 days, however if both parties agree this can be extended to 60 days. The payment period can be extended further, beyond the 60 days, on the proviso that it is “expressly agreed” by the creditor and debtor and that it is not deemed “grossly unfair to the creditor”.