Apni Law Staff asked 1 year ago
A contractor working on a project for a client in India mistakenly billed for an extra expense they weren’t entitled to. The consultant overseeing the project overlooked this error. The client later discovered the mistake and deducted the excess amount from the next payment. They also charged interest at the prevailing Prime Lending Rate (PLR) on the overpayment. The contractor now wants the excess payment recovered, claims the interest shouldn’t be charged, and requests interest on the recovered amount at the market rate. The client argues the contractor intentionally inflated the bill and should view the excess payment as an advance, with the minimum possible interest at the PLR. What’s the fairest resolution to this situation?
Best Answer
Apni Law Staff answered 1 year ago
The fairest resolution likely involves the contractor returning the mistakenly billed amount. While the consultant’s oversight is relevant, the contractor bears primary responsibility. The client can charge interest on the overpayment, but the rate should be reasonable, considering the circumstances. The contractor’s claim for interest on the recovered amount is less likely to succeed as the overpayment was their mistake.
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