Late Fees
The extra charge for paying after the due date.
What it means
A late-fee clause sets what happens when a payment misses its due date — commonly a flat fee, a percentage of the overdue amount, or monthly interest (often written as a rate like 1.5% per month). Many jurisdictions cap late fees and interest, especially in consumer and residential contexts, so what is enforceable varies by state.
Why it matters before you sign
Check both directions: what you will owe if you pay late, and what protection you have when the other side pays you late.
In a contract, it looks like this
Amounts unpaid after the due date accrue a late charge of 1.5% per month or the maximum rate permitted by law, whichever is less.
This definition is a general, educational explanation — not legal advice. XOsign provides AI-assisted document tools and does not provide legal advice; consider consulting a qualified attorney for guidance on your specific situation. Requirements vary by state.
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