[Ridewithnopride]

I am in the process of drawing up a sale contract. I'm using a copy of a contract that was drawn up by an "equine attorney" and I'm getting to the part where I need to come up with a late payment fee.

This buyer is only paying in two lump sums and I already established a date that the 2nd and final payment must be sent/post marked by. Buyer then has a 5 day grace period in which this payment can be sent before it is considered late. If this would occur I need to have a late fee set in place to write in to the contract.

In the contract it leaves a blank space for the late fee. Its set up like this...

Buyer will owe seller a late fee of $___________(or, the amount permitted by law).

If you were writing this contract, what would you (or have you) charge(d)?

Thanks!!

[kalidascope]

Not sure on the amount, maybe a low percentage? But I would make it per day, so as they don't miss the payment then think 'oh well it's late anyway' and drag their feet further.

[Ridewithnopride]

I agree that it should be per day.

The purchase price is $2,500. Would $25 per day be reasonable?

[kalidascope]

Yeah, I was thinking something like that (painful but not impossible). I don't have any experience with this kind of thing though, I'm just guessing.

[macmtn]

Tell us you are keeping possession of the horse until the last payment has been made?

[Ridewithnopride]

Yes, of course! Reg. papers will not be handed over until the last payment has been made.

BTW, this buyer has NOT been late on any payments, as of yet. This is is simply a question that I'm asking, since I need to include this in the purchase agreement.

[Sonesta]

Please consult with a lawyer before finalizing this. The lawyer can tell you what you can and cannot do with regard to late fees so that you do not find yourself accused of usury.

[merrygoround]

I wouldn't sell a horse on payments.!!!! Too many sad stories of lapsed payments and then "Hell on Earth" getting the horse back.

Do get a lawyer!!!!

[SnicklefritzG]

This may sound mean, but I wouldn't sell a horse on payments if the purchase price was $2500. If the person doesn't have that kind of cash on hand, how would they be able to deal with vet emergencies or other stuff like that?

[Peril]

I wouldn't sell a horse on payments.!!!! Too many sad stories of lapsed payments and then "Hell on Earth" getting the horse back.

Do get a lawyer!!!!

I think the OP has indicated that horse is not to be released until contract is fulfilled. I don't see anything wrong or risky about a well written contract that includes a payment schedule for transition of ownership. Previous suggestion of $25 daily surcharge on final payment of $2,500 horse pursuant to grace period sounds right to me. OP should consider whether there is also a penalty incurred if sale does not go through by a certain date (eg, if sale is not completed within 10 business days of the original contract through no fault of the seller, purchaser or seller might terminate agreement with 50 per cent deposit refund to purchaser; if not completed within 20 business days, agreement is void and seller retains entire deposit).

I offer this as a personal opinion. I concur with others who recommend seeking professional counsel beyond the random internet feedback for significant matters, including sales contracts.

I don't see anything inherently wrong or problematic with a payment plan however, assuming it is as well constructed as the OPs posts indicate.

[Peril]

This may sound mean, but I wouldn't sell a horse on payments if the purchase price was $2500. If the person doesn't have that kind of cash on hand, how would they be able to deal with vet emergencies or other stuff like that?

I do think this is also worth considering, didn't see until after I posted my own response.

[Guilherme]

Please consult with a lawyer before finalizing this. The lawyer can tell you what you can and cannot do with regard to late fees so that you do not find yourself accused of usury.

This.

G.