Legal Question in Business Law in California

Re: Grace period and late payment charges

There's no automatic or implied grace period. However, it it generally thought that 5 days is a reasonable period. It depends on what the contract between you and the seller says.

If the seller is just now trying to collect late payments, without having asked for them when the payments were made, a court might not award them.

Re: Grace period and late payment charges

The general rule is that there is no grace period for untimely payments under a contract. On the other hand, failure to make timely payment does not necessarily, or even usually, amount to a serious enough breach to amount to a default. The usual and customary practices of a trade or the prior dealings of the parties may govern.

In your case, since the deal has been completed and the seller is now looking for additional payments, the real question is the extent of his damages. If the payments were only three or four days late, it seems to me that the seller's damages would be a few days' interest at the legal rate, which is probably not worth sueing for.

My suggestion would be to offer to settle with him by calculating the interest on the late payments from the date due until the date paid. This is very likely all he would get in court. You are not required, in my opinion, to pay any penalties nor would the seller have been entitled at any time to declare the transaction in default.