Tennessee late fee law

We have not been able to confirm whether this figure is a contract-silent default, a litigation-only rate, or a ceiling. Do not rely on it without counsel.

No single fixed default: Tennessee sets tiered MAXIMUM effective rates rather than one legal rate. Under § 47-14-103, transactions governed by other statutes use those rates; written contracts may charge up to the 'formula rate' - 4 percentage points above the Federal Reserve's published average prime loan rate, or 24% per annum, whichever is less (§ 47-14-102, published by the TN Dept. of Financial Institutions); all other (non-written-contract) transactions are capped at 10% per annum (§ 47-14-103(3)). Prejudgment interest is discretionary up to 10% under § 47-14-123. Verified via FindLaw/Justia reproductions plus the official tn.gov formula-rate publication (official code is Lexis-hosted). Rate type not classified: Tennessee sets tiered MAXIMUM effective rates rather than a single default legal rate, so there is no single figure that accrues by operation of law. Verify with counsel.

Parties to a written contract may agree to any rate up to the applicable formula rate (avg. prime + 4 points, capped at 24% per annum); specific lender/transaction statutes may authorize other rates. Without a written contract the 10% ceiling applies. Verify current formula rate via the TN Dept. of Financial Institutions.

public+private-construction

Tennessee's Prompt Pay Act (Tenn. Code Ann. § 66-34-101 et seq.) covers construction projects, including private projects (excluding residential of 4 or fewer units), with owner→contractor payment generally due within 30 days of a pay application; § 66-34-601: delinquent payments accrue interest from the date due at the written-contract rate or, if none specified, 1.5% per month. No general private commercial (non-construction) prompt-payment statute found.

The Prompt Pay Act's 1.5%/month default is a distinctive statutory late-charge for construction invoices (contract rate controls if specified); remedies include stop-work rights and notice requirements. Outside construction, flat late fees on B2B invoices follow ordinary liquidated-damages/penalty doctrine and interest components must respect the § 47-14-103 ceilings. Verify with counsel.