Q: as a small business owner is there a limit to the amount of a late fee I can charge for services?
Dance Studio with contracts signed by every register family with detailed outlined fee schedules and associated late fees if not paid within 10 days of the actual due date.
A:
You may wish to look at the Commercial Law article, title 14, and in particular statute Md. Ann Code, Commercial Law § 14-1315.
For consumer contracts, late fees may be capped at a certain % (e.g., 1.5% of the amount past due) and/or limited to the number of times imposed (e.g., $5 or 10% late fee but can be imposed no more than 3 times). The law also requires certain disclosures of late fees.
This post does not offer legal advice or attempt to analyze how the law applies to your particular situation/contract but I hope the general legal information helps. You may wish to seek attorney assistance in creating a standard contract to use in your business.
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