Legal term for payments in Spain

In Spain payment terms are regulated by Law 3/2004 of 29 December 2004, establishing measures to combat late payments in commercial transactions (based on EU Directives 2000/35/CE and 2011/7/UE).

The main provisions set out in this law includes:

1. A maximum payment term of 60 days, applicable also in cases where an acceptance or verification procedure has been set up. The grouping of invoices is permitted under certain conditions, provided that the maximum payment term is respected.
2. Late payment interest is automatically accrued without notice of due date from the creditor. The Law establishes a legal late payment rate consisting on the rate applied by the European Central Bank to its most recent main refinancing operation carried out before the first day of the calendar half plus 8%. Parties may agree to a lower rate, but it must not be abusively low i.e. 70% lower than the legal late payment rate.
3. Late payment automatic compensation of EUR 40, in addition to late payment interest.
4. Nullity regime of unfair terms related to payment terms, which are detrimental to the creditor.

Payment terms are different in the food supply chain:

1. The standard maximum payment term is 60 days
2. For dairy products the maximum payment term is 30 days. This applies to products whose natural qualities are preserved for a period of less than thirty days or that require regulated temperature conditions for marketing and transport.
3. In addition to the nullity of the particular clause, the infringement of maximum payment terms could also be subject to fines by the Spanish Food Agency (AICA).

Yes, the Law establishes a standard payment term of 30 calendar days after the date of receipt of the goods or services, unless the parties agree otherwise.

If the contract contains a verification procedure for the goods or services, it must not exceed 30 days, and the standard payment term will be 30 days after the verification.

In principle, the parties are free to extend the payment terms beyond the standard payment terms, provided that:

1. In no case must the maximum payment term  of 60 days be exceeded;
2. The agreed payment term must not be abusive to the creditor, considering the circumstances such as its commercial justification, purpose, etc.. In this regard, any payment term exceeding the standard payment term of 30 days, but not reaching the maximum payment term of 60 days should be justified, or otherwise may be considered abusive by a court.

Particular rules apply in the food supply chain: unilateral modifications are prohibited, and contracts must include a procedure by which any later modification could be agreed. Of course, any modification cannot extend payment terms longer than the 30 or 60 day periods.

In contracts with a single payment, the payment term begins on the date of receipt (or verification) of the goods or services, so normally the main obligation of the PO is met before the payment deadline began. 

However, additional obligations may be established beyond the payment term. In this regard, it must be noted that the Law establishes that late payment interest will accrue when a party has fulfilled its contractual and legal obligations under the contract. Nevertheless, it is reasonable to assume that this only refers to the main obligations under a contract, and does not apply to additional obligations set forth after the payment term or to obligations surviving the termination of the contract e.g. confidentiality provisions, guarantees or liability obligations). 

As of April 2020, there is no penalty regime generally applicable for the breach of payment terms. The consequences of the breach are civil  such as nullity of the clause, compensation to the creditor, etc.. Exceptionally, fines can be imposed by the AICA if late payment terms infringe the food supply chain.

However, there have been several legislative initiatives  to establish a penalty regime for late payments. The last such initiative did not come to an end because parliament was dissolved due to the April 2019 elections. Currently, several parties support draft laws that nclude a penalty regime. Such a law may be passed in the near future.

No special general measures on payment obligations have been imposed as a result of the COVID-19 situation.

However, certain measures affect payment obligations for contracts such as gas and electricity supplies for entrepreneurs and SMEs, and lease of residences and business facilities.