[evincarofautumn]

It’s perfectly reasonable if the rate is agreed on up front, though I wouldn’t charge 10% myself. Consider (legitimate) short-term loans—they have high interest rates to discourage abuse by debtors. Here, the author is perfectly willing to renegotiate until the deadline. Once the deadline is past, however, the client is simply in breach of contract, and ought to be penalised as such.

[westicle]

Apart from the fact that these types of contractual terms are legally invalid and unenforceable.

http://en.wikipedia.org/wiki/Penal_damages

[evincarofautumn]

Wow. That’s very interesting. So the rate must actually be a reasonable estimate of expected loss. If you were to bill for the time you took out of your schedule to resolve the payment issue, it might work out to a few percent anyway.