[Case Summary]This case involves a dispute over the recovery of the purchase price and attorney's fees under a sales contract (arbitration). A Beijing-based trading company supplied 365 sets of Haier water heaters with a total price of 375,950 yuan, but the other party only paid 92,700 yuan and defaulted on 271,971.5 yuan. The trading company entrusted the Beijing Henglu Law Firm to handle the case.Li YonghuiInitiate arbitration and request payment of the outstanding debt, overdue interest, and attorney's fees. The arbitration tribunal ruled that the other party should bear the costs of the outstanding payment of 27,1971.5 yuan, overdue interest calculated at 1.5 times the LPR rate, attorney's fees of 30,000 yuan, and arbitration fees of 18,048 yuan. The core disputes are the calculation standard for overdue payment losses and whether the defaulting party should bear attorney's fees and arbitration fees. Applicable laws: the Contract Chapter of the Civil Code of the People's Republic of China, the provisions of the Purchase Contract, and relevant judicial interpretations on overdue payment losses.

I. Review of the case

"If the buyer fails to pay the goods, can I recover the attorney's fees through litigation?" — This is one of the most concerned issues for suppliers when collecting accounts receivable. On August 27, 2021, the applicant, Beijing * Trading Co., Ltd. (hereinafter referred to as Beijing Trading Company), and the respondent, Shanghai * Construction and Acquisition Trading Co., Ltd. (hereinafter referred to as Shanghai Trading Company), signed a "Purchase Contract", agreeing to supply Haier water heaters. The applicant actually supplied 365 sets with a total price of 375,950 yuan. According to Article 7.1.3 of the contract, after the overall project is completed and passed the acceptance inspection, the respondent shall pay 97% of the total settlement price within 25 days after the applicant completes the settlement.

The two parties signed the "Project Material Settlement Confirmation Letter" on November 18, 2021, but the respondent failed to make the payment as agreed and only paid 92,700 yuan, which constituted a breach of contract. Beijing Shangmao Company entrusted Beijing Henglu Law Firm to handle the case.Li YonghuiSubmit an arbitration application, requesting Shanghai Trading Company to pay the overdue payments, interest on overdue payments, and bear the attorney's fees paid by the applicant to recover the overdue payments.

II. The focus of the case

  • Focus 1: The identification criteria for losses due to overdue payments.The applicant claims that it is reasonable to calculate the interest rate based on the Loan Prime Rate (LPR) announced by the National Interbank Funding Center, plus an additional 30% to 50%. Is this claim reasonable and should it be supported?
  • Focus 2: When the contract does not stipulate attorney's fees, should the defaulting party bear the attorney's fees and arbitration costs?It needs to be determined based on the facts of the breach of contract and the discretionary rules.

III. The professional intervention of Hengluo Law Firm

The applicant (plaintiff) claims that:The Purchase Contract between the two parties is legal and valid. The applicant has supplied 365 sets of goods with a total price of 375,950 yuan, but the respondent has only paid 92,700 yuan, leaving a balance of 271,971.5 yuan (the amount payable of 364,671.5 yuan minus the amount paid of 92,700 yuan) that should be paid. The respondent has been in arrears for more than a year. It should compensate for the losses caused by the late payment based on the LPR and add 30% to 50% as a penalty, and bear the attorney's fees and arbitration fees.

The respondent (defendant) argued that:We acknowledge that the outstanding debt of 271,971.05 yuan has not been paid, but we do not recognize the losses caused by the overdue payment and refuse to bear the attorney's fees and arbitration costs.

Hengluo Lawyer's Agency Opinion:The lawyer pointed out that the "Purchase Contract" is legal and valid, and both parties should perform their obligations according to the agreement. The applicant has provided water heater procurement and installation services in accordance with the agreement, but the respondent has only paid part of the purchase price and should compensate for the losses caused by the overdue payment. Due to the fact that the respondent has been overdue in payment for more than a year, the applicant has suffered significant losses in advance payments. It is reasonable and lawful for the applicant to calculate the overdue payment losses based on the LPR plus 30% to 50%, and this should be supported. Regarding the attorney's fees, although the contract does not stipulate it, the dispute is caused by the respondent's breach of contract, so the respondent should bear the corresponding attorney's fees.

IV. Outcome of the case

The arbitral tribunal supported our claims regarding the total amount of payable goods, interest on overdue payments, and arbitration fees; as for attorney's fees, although the contract did not stipulate them, considering that the dispute was caused by the respondent's breach of contract, we partially supported the applicant's claim for 50,000 yuan in attorney's fees, ruling that the respondent should pay 30,000 yuan in attorney's fees. The ruling is as follows: (1) The respondent shall pay the applicant 27,197.15 yuan in goods; (2) The respondent shall pay interest on overdue payments at 1.5 times the loan market reference rate (LPR) from December 26, 2021 to the date of actual settlement, based on the base amount of 27,197.15 yuan; (3) The respondent shall compensate the applicant for 30,000 yuan in attorney's fees; (4) The arbitration fees of 18,048 yuan in this case shall be borne by the respondent. Beijing Henglu Law FirmLi YonghuiHelp the client successfully protect their rights and interests.

5. Henglu Law Firm's Advice

When suppliers sign sales contracts, it is recommended to clearly stipulate the liability for breach of contract due to late payment and the responsibility for bearing legal fees; during the collection process, it is important to preserve evidence of supply, settlement, and reminders, which can be used to claim interest for late payment and reasonable defense costs in arbitration or litigation. This case was handled by Beijing Henglu Law FirmLi YonghuiThe lawyer (practice license number: 11101199611955812, subject to the document issued by the judicial administrative organ) acts as the agent.

VI. FAQ on Recovering Overdue Payments for Goods

  1. Q: If a customer fails to pay the goods and services on time, can I claim overdue interest from them?
    A:Yes. If the supplier fulfills its obligations as agreed but the other party fails to make payment on time, the supplier may claim damages for the overdue payment calculated based on the LPR plus a certain percentage. In this case, the interest rate is calculated at 1.5 times the LPR.
  2. Q: The contract doesn't mention the attorney's fees. Can I make the other party pay them during the lawsuit?
    A:When the contract does not stipulate it, if the dispute is caused by the other party's breach of contract, the arbitration or the court may, based on the circumstances, decide to support a portion of the attorney's fees. In this case, 30,000 yuan was supported.
  3. Q: Who will ultimately bear the arbitration fees and litigation costs?
    A:The arbitration/litigation costs claimed by the successful party are usually borne by the losing party. In this case, the arbitration fee of 18,048 yuan shall be borne by the respondent.
  4. Q: The other party has only paid part of the purchase price. How should the outstanding balance be calculated?
    A:The principal amount of the debt shall be determined by subtracting the amount paid from the total amount payable. In this case, the amount payable is 36,467.15 yuan, and the amount paid is 92,700 yuan, so the outstanding amount is 27,197.15 yuan.
  5. Q: What should I do if the other party refuses to settle the payment after the delivery of the goods?
    A:Sign the settlement confirmation form in a timely manner and keep the evidence of delivery, acceptance, and reminders. If no agreement can be reached through negotiation, you can apply for arbitration or sue for recovery based on the contract and settlement documents.