Legal Definitions - in diem

In diem is a Latin legal term meaning for each day or per day. It refers to something that is calculated, applied, or accrues on a daily basis.

Here are some examples to illustrate its application:

• Example 1: Late Payment Penalties

  Imagine a contract for a construction project states that if the contractor fails to complete the work by the agreed deadline, they will incur a penalty of $500 in diem for every day the project is delayed. This means that for each day beyond the deadline, an additional $500 penalty is added, accumulating daily until the work is finished.

• Example 2: Interest Calculation on a Loan

  A short-term business loan might specify that interest will be calculated in diem at a certain percentage. If the annual interest rate is 10%, the daily interest would be 10% divided by 365 days. This ensures that the borrower pays interest precisely for the number of days they have used the funds, rather than a monthly or annual lump sum, reflecting the daily accrual of the interest.

• Example 3: Daily Rental Charges

  Consider a specialized piece of industrial equipment rented for a specific project. The rental agreement might stipulate a charge of $1,000 in diem for the use of the machinery. This means the company renting the equipment is billed $1,000 for each day it remains in their possession, regardless of whether it was used for the full 24 hours, emphasizing the daily rate of the rental.