Analysis of legislation regulating credit management and late payment

Abstract

The problem of late payment of debts is one which concerns a Jot of traders and businessmen in Malta and the purpose of this thesis is to analyse the provisions of the law dealing with credit management aspects and late payment to see whether they are effective or not in providing adequate remedies to creditors who provide goods or services on credit or otherwise grant credit to their customers. The first chapter is meant to introduce the reader to some types of credit agreements which traders usually enter into, where their characteristics and the differences between them are examined, with a special focus on the necessary clauses which a creditor should try to insert in order to protect his credit. The importance for creditors to secure their credit is the theme of the second chapter where the various forms of security offered by law are examined and contrasted with one another. The provisions of the Late Payment Directive, whose scope is that of combating the problem of late payment of commercial debts in Europe, are discussed in the third chapter, together with the provisions introduced into the Commercial Code by means of L.N. 233 of 2005 which implement the said Directive. Reference is also made to the implementation of the Late Payment Directive in Italy and the United Kingdom for comparative law purposes. The final chapter discusses the charging of interest, where the Civil Code provisions regulating the charging of interest are contrasted with those of the Late Payment Directive. The concept of usury and the exceptions thereto is also discussed with particular attention on compound interest as a hidden form of usury.