forsinkelsesrenteloven

Forsinkelsesrenteloven, or the Danish Interest on Overdue Payments Act, is a core piece of Danish legislation governing the financial consequences of late payments in commercial transactions. Its primary purpose is to protect creditors, especially smaller businesses, by ensuring they receive timely compensation when a debtor fails to pay an invoice by its due date.

The law stipulates that if a payment is late, the creditor is automatically entitled to claim interest on the overdue amount. This interest, known as forsinkelsesrente, is calculated based on a statutory rate set by the Danish National Bank. The rate is typically the bank's lending rate plus eight percentage points, providing a significant incentive for debtors to pay on time. The interest begins to accrue from the day after the payment was due.

The act applies broadly to transactions between businesses and from businesses to public authorities. It does not generally cover consumer transactions, which are regulated under separate consumer protection laws. For the law to apply, the debt must be certain and due, meaning the invoice must be clear, correct, and its due date has passed.

A key feature of the law is that it operates automatically. Creditors do not need to remind the debtor or issue a formal warning for the interest obligation to take effect. However, the parties can agree to different terms in their contract, as long as such terms do not worsen the creditor's position unfairly. Forsinkelsesrenteloven thus plays a vital role in maintaining cash flow and financial stability within the Danish business community.