Late Payment Between Businesses in Montenegro: The Thirty-Day Default and Sixty-Day Cap of Law 113/2024, How Default Interest Is Fixed Each Half-Year, the Forty-Euro Compensation, the Clauses That Are Void, and How a Finance Department Should Draft and Chase

The payment clause is the part of a supply contract that a purchasing department negotiates hardest and a legal department reads least. In Montenegro that habit has been expensive since 5 December 2024, when the Law on Deadlines for Settlement of Monetary Obligations came into force and put a statutory ceiling on payment terms between businesses, attached interest and a fixed compensation to every late invoice without any reminder, and declared void the clauses by which large buyers used to stretch their suppliers. I now see two kinds of mistake in the contracts that cross my desk: buyers who still write ninety-day terms into their purchase orders and do not know the clause is void, and suppliers who chase late invoices with reminder letters and do not know that interest and compensation have been running from the first day. This page sets out the law as it stands, the interest rates the Central Bank has fixed for 2026, the rules of the Law on Obligations that sit underneath, and how a finance or legal function should draft, invoice and chase so that the statute works for the company rather than against it.

Sources, checked 11 September 2026. Law on Deadlines for Settlement of Monetary Obligations (Official Gazette of Montenegro 113/2024, in force 5 December 2024), Articles 1 to 15; Law on the Rate of Default Interest (83/09 and 75/18), Articles 3 to 6; the Central Bank of Montenegro's decisions of 5 January 2026 and 1 July 2026 on the default interest rate; Law on Obligations (47/08, 4/11, 22/17, 123/24 and 94/26), Articles 284 to 286, 317, 320, 322, 332, 344, 345 and 383.

Who and what the statute covers

Article 1 of Law 113/2024 governs the deadlines for settling monetary obligations in commercial transactions between business entities, and between the public sector and business entities. Article 3 defines the terms widely: commercial transactions are contracted deliveries of goods or services for consideration, including investment and construction works and utility services; business entities include companies, entrepreneurs, public enterprises and other legal persons founded under special laws; the public sector covers direct and indirect budget users, companies performing activities of public interest in which the state or a municipality holds more than half of the shares, and companies in which representatives of state or local bodies form more than half of the management body. The monetary obligation is the agreed consideration stated in the invoice or an equivalent request for payment, including taxes, duties and other direct procurement costs. Article 2 excludes a business against which bankruptcy proceedings have been opened, except for that business's own commercial transactions. A hotel buying linen, a developer engaging a contractor, a retailer taking stock from a distributor and a manufacturer paying a haulier are all inside the statute; a loan, a lease of premises and a sale to a consumer are not.

The thirty-day default and the sixty-day cap

Article 4 sets the rule for transactions between businesses. The deadline for settling a monetary obligation is thirty days from the creation of the debtor-creditor relationship, which arises on the day the goods are received, the service performed, or the accompanying documents received or certified. The contract may set a different deadline, but not longer than sixty days. Where no deadline is agreed, the debtor must pay within thirty days without any reminder. The deadline runs from the day the debtor received the invoice or equivalent request from a creditor who has performed; where the day of receipt cannot be established with certainty, or the invoice arrived before performance, from the day of performance; and where the contract or the law provides for an inspection procedure and the invoice arrived before or during it, from the end of that procedure. An inspection period may not exceed thirty days from receipt of the goods or services, unless a longer period is justified in a particular case and does not harm the creditor within the meaning of Article 7. The contract may not fix the date of receipt of the invoice. Article 5 sets the public sector's deadline at thirty days, with a sixty-day maximum only for the Health Insurance Fund, its beneficiaries and public bodies that carry on commercial or industrial activities on the market. Article 9 applies the consequences of delay to each instalment separately where payment by instalments is agreed.

Interest that runs without a reminder

Article 6 provides that a debtor who is late owes the creditor, without any reminder, the principal and interest for late payment, provided the creditor has met its contractual and legal obligations and has not received the principal on time, unless the debtor is not responsible for the delay. The statutory rate is the default interest rate that the Central Bank of Montenegro sets, defined as the rate applied to the European Central Bank's main refinancing operations increased by eight percentage points, and it is fixed twice a year, for January to June and for July to December. That is the same rate the Central Bank publishes under the Law on the Rate of Default Interest, which after its 2018 amendment adds eight points to the European Central Bank's main refinancing rate in force on the first day of the half-year: the decision of 5 January 2026 fixed the rate at 10.15 per cent for the first half of 2026 and the decision of 1 July 2026 at 10.40 per cent for the second half. Between businesses a different rate may be agreed, but not higher than the statutory rate in force on the day the contract was concluded; where interest is agreed without a rate, the statutory rate applies. Under Article 6 of the Law on the Rate of Default Interest the interest is simple, calculated annually on the calendar number of days, and is not added to the principal at the end of a period. The Law on Obligations fills in the rest: Article 284 gives the creditor default interest at the rate set by the special law and allows the parties to agree a lower or higher rate within the general limits of good faith; Article 285 gives the creditor the interest whether or not it suffered loss and the difference to full compensation where its loss exceeds the interest; Article 286 forbids interest on unpaid interest except where a law provides for it, and allows interest on overdue interest only from the day a claim for it is filed with the court; and Article 320 applies a part payment first to costs, then to interest and last to principal, so that a debtor who pays the invoice amount after the due date has not discharged the debt.

The forty-euro compensation and the recovery costs

Article 7 adds a fixed compensation of at least 40 euros for each commercial transaction in which the deadline was missed, payable without a reminder as compensation for recovery costs, in addition to the interest, and regardless of whether the creditor suffered any loss; the Law states that this covers costs incurred in consulting a lawyer or engaging a public enforcement officer. The compensation does not exclude or limit the creditor's right to damages, to the costs of compulsory enforcement or to its other rights arising from the delay. For a supplier that issues many invoices to the same slow payer the compensation accumulates invoice by invoice, and a finance department that does not invoice it is leaving statutory money on the table.

The clauses that are void

Article 8 is the part of the Law that large buyers most often ignore. Void are: any clause, act or practice that excludes, limits or conditions the creditor's right to interest for late payment or to the fixed compensation; any clause that fixes the date of receipt of the invoice outside the agreed payment term or the Law's conditions; any clause with a public sector debtor agreeing a term longer than sixty days, and any term longer than thirty days outside the Health Insurance Fund and commercial public bodies; and, between businesses, a payment term longer than sixty days, an inspection period longer than thirty days where the circumstances show it causes manifest inequality to the creditor's detriment, an interest rate contrary to good faith that causes such inequality, and the exclusion of the fixed compensation. Beyond that list, any clause or practice on the payment date, on other late payment interest or on recovery costs that is grossly unfair to the creditor is void, judged on every deviation from good practice and good faith, the nature of the product or service and whether the debtor had any objective reason to depart from the statutory rate, deadlines or fixed amount; the exclusion of the right to interest is always unfair, and the exclusion of the compensation is presumed unfair. Three further articles complete the statute. Article 10 lets an undisputed claim, once an enforceable document exists, be collected in a shortened procedure before a public enforcement officer within ninety days whatever the amount. Article 11 preserves the supplier's retention of title over delivered goods until payment, provided it was expressly agreed before delivery. And Article 15 makes late payment itself an offence: a business that fails to pay within the deadlines of Articles 4 and 5 faces a fine of 1,000 to 10,000 euros, and the responsible person in it a fine of 500 to 2,000 euros, so a chronic late payer risks more than interest. Article 383 of the Law on Obligations limits claims between legal persons from commercial contracts to three years, running separately for each delivery, work or service, a period that a reminder does not interrupt.

The rules of the Law on Obligations that sit underneath

Three general provisions decide the cases the special statute does not. Article 322 of the Law on Obligations provides that where a commercial contract sets no deadline for a monetary obligation, the debtor must pay without being asked; Article 332 puts a debtor in default when it fails to perform within the set time, and where no time is set when the creditor calls for performance orally or in writing, by an out-of-court reminder or by starting proceedings, and excuses the debtor who proves that the delay was caused by force majeure or other circumstances for which it is not responsible. Article 317 obliges the creditor to accept part payment of a monetary obligation unless it has a special interest in refusing. Articles 344 and 345 allow a debtor to set off a due monetary claim against the creditor's claim by a declaration to the other party, with effect from the moment the conditions were met, which is how disputed counter-invoices are usually resolved in practice and why a company's declaration of set-off should be dated and delivered in a form that can be proved.

How a finance or legal function should draft, invoice and chase

For the buyer, the drafting rule is simple: the payment term is thirty days unless the contract says otherwise and may not exceed sixty, an inspection period of up to thirty days may be added where the goods or works justify it, and any attempt to move the start date by defining when the invoice is deemed received is void. A buyer that needs more time negotiates a price, not a term, or agrees instalments under Article 9 with each instalment carrying its own clock. For the supplier, the invoicing rule is to date the delivery, the invoice and its receipt in a way that can be proved, to invoice the statutory interest and the 40 euros as separate lines when the deadline passes, and to apply part payments to costs and interest first as Article 320 requires; the chasing rule is to remember that a reminder is not needed to start interest and does not interrupt limitation, so the three-year clock of Article 383 is managed by proceedings, by the debtor's written acknowledgement or by a payment on account, not by letters. When the debtor is a public body, the term is thirty days and the interest rate cannot be negotiated. When the debtor does not pay, the enforcement route is on the enforcement against a company page, the limitation mechanics on the limitation periods page, and the quantification of loss beyond the interest on the damages page. A contractor's exposure to late certification and payment in construction is on the contractor risk page, and the wider legal function this page belongs to, from contract turnaround to negotiation mandates, is on the outsourced legal department page.

Whose side we are on, and how we are paid

The buyer's procurement template was written to lengthen the term. The supplier's accountant books the invoice and waits. The bank charges for the overdraft that the late payment causes. None of them is paid to tell you, before you sign, that your ninety-day term is void, or, before you chase, that interest and forty euros per invoice have been running since day thirty-one.

We take no commission or referral fee from enforcement officers, collection agents, banks or counterparties, in any form, on any file. The fee you pay us is our only income from your matter, and it does not depend on the sum recovered or on whether a contract is signed. Because our position does not move with the outcome, telling a buyer that its clause will not survive, or a supplier that its claim is time-barred, costs us nothing to say.

One boundary, stated plainly. We are lawyers, not licensed investment advisers and not a collection agency. We do not decide whether a customer is worth keeping. What we protect is the Montenegrin legal position: a payment clause that is valid, an invoice and delivery record that prove the start of the period, interest and compensation invoiced correctly, set-off declared in a form that holds, and limitation managed before it runs out.

Before the next purchase order or the next reminder

Send us the contract or purchase order, the invoices in question with their delivery and receipt evidence, any correspondence with the counterparty and the payments received. We will tell you what term applies, from which day interest and compensation run, what is void in the document, how to apply the payments received and what step preserves the claim. Our corporate work in Montenegro is described on the Montenegro lawyer page.

What this page does not settle

Consumer payments, loans and leases, cheques and bills of exchange, the enforcement procedure in detail, insolvency set-off, foreign currency debts and the position of contracts concluded before 5 December 2024 are separate subjects. The Central Bank's rate changes every half-year; the figures above are those fixed for 2026.