Houma, LA asked in Contracts, Business Law, Collections and Gov & Administrative Law for Louisiana

Q: Is a b2b customers continued purchases count as agreeing on interest we advised we would charge on past due balances?

I have a customer with an open charge account on net 30 day payment terms. His operations manager signed the credit application which in short says we reserve the right to charge interest on past due balances (1.5%/month). After seeing the writing on the wall and realizing I would have to get an attorney involved eventually we began charging said interest to help offset the inevitable attorney fees associated with collecting the balance owed to us. The owner is arguing that his operations manager did not have the authority to sign this credit application. However, the owner was advised by his staff that we were now charging them interest on their past due balances and he continued to purchase from us. I am wondering if his continued purchases after being advised of interest being charged can be legally classified as him acknowledging his companies obligation to pay the interest?

2 Lawyer Answers
Martha Warriner Jarrett
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A: This is a state law agency question, not really a bankruptcy question. However, it appears, from the facts you laid out that the operations manager likely was the owner's agent and therefore authorized to sign contracts on behalf of the business. For a better answer, however, you should consult a local business attorney.

Timothy Denison agrees with this answer

Timothy Denison
Timothy Denison
  • Consumer Law Lawyer
  • Louisville, KY

A: Agent had apparent authority to sign for owner. Owner likely will have to pay the interest.

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