Document background
The Late Payment Dispute Letter is a critical business document used in the Indian commercial context when a business needs to formally address overdue payments from its debtors. This document becomes necessary when regular invoices and payment reminders have failed to secure payment, but before initiating legal proceedings. It serves as a formal demand letter that can later be used as evidence in legal proceedings if required. The letter must comply with Indian legal requirements, particularly the MSMED Act 2006 for MSME vendors, and the Indian Contract Act 1872. It typically includes details of outstanding amounts, interest calculations as permitted under Indian law, payment history, and a clear demand for payment within a specified timeframe. The document is particularly important in India's business environment where delayed payments are a common challenge, especially for smaller businesses and suppliers dealing with larger corporations.
