Legal Definitions - ex mora debitoris

ex mora debitoris is a Latin legal phrase that historically referred to the principle that a debtor (the person or entity owing money) could be charged additional costs, such as interest, specifically because of their delay in making a payment.

In essence, it means "on account of the debtor's delay." This concept justifies imposing penalties or additional charges when a payment is not made by its due date, directly attributing those extra costs to the payer's tardiness.

• Example 1: Business Loan Default

  A small manufacturing company secures a loan from a bank with an agreement to make monthly payments by the 15th of each month. Due to unexpected cash flow issues, the company fails to make a payment on time, finally submitting it five days late. The loan agreement specifies that overdue payments will accrue interest at a higher rate for each day they are late.

  This illustrates ex mora debitoris because the additional interest charged by the bank is directly imposed "on account of the debtor's delay" in fulfilling their payment obligation.

• Example 2: Overdue Supplier Invoice

  A retail clothing store receives a shipment of new inventory from a wholesaler. The invoice states "Net 30," meaning payment is due within 30 days of the invoice date. The store's accounting department overlooks the invoice, and payment is made 10 days after the 30-day deadline. The wholesaler's terms and conditions allow for a late payment fee to be added to the total for any overdue invoices.

  Here, the late payment fee is applied "ex mora debitoris," as it is a direct consequence of the retail store's delay in settling its debt to the wholesaler.

• Example 3: Residential Rent Payment

  A tenant in an apartment complex has a lease agreement that stipulates rent is due on the first day of each month, with a late fee applied if payment is not received by the fifth day. The tenant pays their rent on the seventh day of the month.

  The landlord's imposition of the late fee is an application of the principle of ex mora debitoris, as the fee is charged solely "on account of the debtor's (the tenant's) delay" in making the rent payment by the agreed-upon deadline.