Combating late payments in commercial transactions — exceptions
The general rule of the newly adopted Law on the Terms for the Settlement of Monetary Obligations in Commercial Transactions is that all payments between business entities have to be settled within 60 days and where the debtor is a subject from the public sector, the maximum agreed period for payments is 45 days.
The Law foresees some exceptions from this general rule for business entities and for the public sector, as well as for the business entities in the restructuring proceeding. The exceptions are as follows:
- Instalment payments - payment period is 90 days, whereby at least 50% of the monetary obligation has to be paid within the first half of the agreed payment period;
- Bank guarantee - where the debtor provides a bank guarantee (unconditional, irrevocable and payable on first demand without the right to object), the parties are free to agree different payment periods than provided under the Law (longer than 60 days);
- Bill of exchange guaranteed by the bank - where the debtor provides a bill of exchange guaranteed by the bank, the parties are free to agree different payment periods than provided with the Law (longer than 60 days)…
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