Legal Question in Business Law in California

The vet is not allowed to change the terms of a contract after he has performed all services and the only thing remaining for him to do is wait for payment.

On the other hand, he would be allowed to charge interest or a service charge in exchange for a formal agreement to let you pay over time. In addition, if the bill was due at the time of service, the court would likely award him prejudgment interest on the amount owed should he commence a court action to collect.

You should probably contact the vet and try to negotiate this, or pay off the debt. A proper service charge is not unreasonable in this circumstance -- why should the vet give you an interest-free loan?

You should also make sure that the rate of the service charge is legal. Without more information and a bit of research, I cannot answer that question.

OK, the original contract said payment was due at the time of service. You breached the original contract by not paying in full "at the time of service" or pretty close. Now, a second, unwritten contract is in effect. Its terms go sorta like this: "We'll let you pay over time, but we're going to charge you something additional for that privilege."

If the legality of the unwritten substitute contract were tested in court, the judge would rule (I'm pretty sure) that the vet can charge you interest plus any costs for the additional bookkeeping and mailing, but not a penalty. The imposition of penalties is something only the court can do. However, the vet would be allowed to recoup his/her additional costs.

The bottom line is that if the additional monthly charge is fair and reasonable and in line with an estimate of the vet's added costs, it would pass muster in court. If it is unreasonably high in relation to what the vet is actually enduring in the way of additional costs and expenses to give you credit, the court would rule in your favor. 1.5% per month is often the dividing line between reasonable and unreasonable, but that will vary with the circumstances.

If the original contract does not specify an amount of interest, and he brought this to court, the judge would probably award prejudgment interest at the legal rate, which is 10%. You are best to negotiate this and resolve this without involving the court.