Most license agreements include clauses allowing the licensor to charge interest on overdue license fees, royalties and reimbursements. However, many institutions either don't include these clauses in their contracts, or don't invoice for interest on overdue payments.
Some universities are missing out on millions of dollars in interest due to late payments, or paying substantial amounts of interest to their own bank due to late payments causing cash flow delays. In some cases, interest may also be charged on damages for breaching an agreement, and institutions are missing out on interest when they settle a matter out of court. There are a number of reasons why some universities do not include interest clauses in their contracts, or do not charge interest on late payments. For lawyers, this could be because an interest clause is not included in template documents, because a standard clause is not available, or because there is a lack of understanding of the institution's financial procedures. From an accounting perspective, this may be because the institution's systems make it difficult to charge interest, or because of a poorly drafted clause in the contract. For licensing officers or business development managers (BDMs), there can be commercial pressure not to include these clauses, or a limited understanding of how simple it can be for interest to be charged if necessary.
The purpose of this course will be to inform lawyers, accountants and BDMs about why interest would be charged, how to include interest charging in your contract, and how to charge interest in the event that someone is late. Our team will take you through a range of issues that you need to think about to be able to charge interest, implement the practice, and clear up some of the complexities so that it is easier for BDMs, lawyers and accountants to work together in this area.
By the end of the webinar, a tricky and complicated topic should be simpler and easier to understand for all involved.