Penalty clauses - Do you use them?

[Ted]

Although I am no longer a builder and am an aviation security person, I was wondering what the Brewcabin's experience is of penalty clauses.

When working for a client who does not pay on time, what do you do? Do you carry on regardless at potential hige loss to yourselves, do you down tools and risk being classed as juvenile in your behaviour or do you get legal and insist on interest on late payments?

Also does it vary among your clients? For instance, if you have a one off build for a private household, a build for a developer who you have worked for several times or you are doing public works...

People who pay late cause unnecessary problems... how do you best deal with these late payers...???

I am wanting to introduce penalty clauses against an airline that always pays late but it will begin to sour the relationship and this is my main concern...

[local patios and driveway]

I wouldnt worry about the relationship with a late payer, fair is fair, they are holding back on food for your kids.

My invoices have a standard "late payments will incurr interest charges"

[Dave_L]

Stop work if payments are late/delayed.

[Ted]

In the airline industry, it is a little harder to down tools overnight. Generally one is in a 36 month contract and to suddenly walk out and leave a client with an aircraft (worth many millions of dollars) in an airport unguarded will cause them a bit of stress. My client is a leading airline (sort of equal to BA, ie, a leading European one) so its behaviour is certainly poor. I'm just becoming sick of regular monthly meetings with its manager to arrange payment. I think penalty clauses are the way forward... anyone had bad experiences with these in the building trade?

[Carberry]

It's a balancing act, you want your payment on time and you are entitled to late payment interest etc but you don't want to piss them off too much or you lose the client. Given that you're on a 36 month contract though I would be willing to piss them off a whole lot more because if they break that contract then you can take them to court.

[GB_Groundworks]

we did a big groundworks job putting the pads in for a new stand at a rugby ground, 80k job and the steel fixers were crap at paying so we started threatening them with interest charges they then got very arsey over -/+ 10mm etc on pads 11mm they started adding penalty charges etc became tit for tat

[DNgroundworks]

I have done a mixture of all, carried on and risked it but got lucky and ended up getting paid, been knocked for few quid before, also walked off a few jobs taking machine keys and all men with me, stopped the entire job for a day or two untill they sorted more subbies out, that was a 3 million public works project, caused them some issues lol.