Interest Default Sample Clauses

The Interest Default clause establishes the consequences and procedures that apply when a party fails to make a payment on time under the agreement. Typically, this clause specifies that overdue amounts will accrue interest at a predetermined rate, calculated from the date the payment was due until it is actually paid. For example, if an invoice is not settled by the due date, the defaulting party may be required to pay additional interest as a penalty. The core practical function of this clause is to incentivize timely payments and compensate the non-defaulting party for the delay, thereby reducing the risk of late payments and financial loss.