As a commercial debt collection attorney, I know that although a credit application and personal guaranty is essential to cleanly control your terms of sale; if you don’t have one, all is not lost. You may recover more than statutory interest and attorneys fees even absent a credit application with a commercial debt collection attorney. Although highly technical, Uniform Commercial Code Section 2-207 governs when terms between merchants become part of the parties’ contract.
In Plants International, Inc. v. Barry R. Boyle, dba Boyle’s Greenhouses, Middlesex Superior Court, Civil Action No. 91-5406-B (December 16, 1993, Brady, J.), the back of the order form contained the terms of sale in reasonably plain business language. One of the clauses stated:
All accounts are strictly due within 30 days after the date of invoice, 2 pct. discount is allowed for payment within 10 days. On overdue accounts 18 pct. interest per annum will be charged together with the collection expenses plus attorneys.
Judge Brady enforced the terms stating:
This clause does not involve an element of unreasonable surprise. The Uniform Commercial Code comment expressly sanctions a clause providing for interest on overdue invoices. The recovery of attorneys fees and collection expenses, should the seller be required to resort to the courts to collect its invoices, is also commercially reasonable and would not materially alter the contract between the parties.
Due to the debtor’s numerous transactions without objection to my client’s terms, I successfully argued that its debtor could not legally claim that it was not responsible for interest and attorneys fees. Although a signed credit application which included those terms would have sped up recovery, as a commercial debt collection attorney, my advocacy of the applicability of the UCC got my client paid.
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