Every day we are approached by sellers and service providers looking to recover money from defaulters under invoices they have raised. 9 out of 10 times the invoices don’t include some of the essential terms, which would make it much easier and cost-effective for the client to file legal proceedings to recover their invoice amount and also interest on that amount. Here are some points you ought to include in your invoices:
2) Rate of Interest: Even when you win a case, you’ll get your entire invoice amount but you may not get any interest, or if you are lucky you might get a maximum interest of 6%. Unless there is a contract or invoice that provides for a higher rate of interest, it becomes very hard to claim it in court. Include something like “Interest @18% for payments received after ___ days from date of invoice”.
3) Due Date: If there is a credit period then mention the due date of the invoice. If payment is supposed to be made immediately then the date of the invoice itself is the due date. This is important for clarity and also for something called “limitation”. For ordinary cases of recovery of money under an invoice the case has to be filed within three (3) years of the date the invoice is due. If you don’t mention the due date, the timer for the 3 year period will start ticking from the date of the invoice itself.
4) “Disputes to be decided by sole arbitrator at <city>”: There is a shortage of judges in courts in India and cases take years, and sometimes decades, to reach a conclusion <Thareek pe Thareek…>. An arbitrator is a private individual who decides on your dispute, and whose decision is binding on the parties. Generally, cases before an arbitrator get done in 18 months. But currently appointing an arbitrator isn’t a very feasible option in India, if the money being claimed is less than 10 lakhs, so only put this in invoices of higher amounts.
5) Reference to Purchase Order (if any): If the goods/services were supplied/provided pursuant to a purchase/work order then ensure that you make a reference to it so that it becomes easy for your lawyers and a Court of law to co-relate them.
Also, please remember to keep your invoices and delivery receipts carefully.
The above article is written by Vikrant Shetty of Taurus Legal.
Note: The above is provided for general
informational purposes only and should not be considered a legal opinion of
Taurus Legal nor relied upon in lieu of specific advice. We disclaim any
liability that might arise from your use of any information contained in this
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