Document background
The Notice of Late Payment is a critical business document used when payment obligations have not been met according to agreed terms. This document is particularly important in the Indian legal context, where it serves as a formal demand for payment and can be a prerequisite for legal action. The notice should be issued when payment is significantly overdue and previous informal reminders have been unsuccessful. It typically includes details of the original transaction, payment terms, outstanding amount, applicable interest under Indian law, and consequences of continued non-payment. The Notice of Late Payment must comply with Indian contract law and may reference specific legislation such as the MSMED Act 2006 (for MSME creditors) or the Interest Act 1978. This document is often required before escalating to legal proceedings and serves as evidence of formal attempt at debt recovery.
