Grace period

Grace period

A grace period is a period of time past the deadline for fulfilling an obligation during which a penalty that would be imposed for being late is waived. Grace periods, which can range from a number of minutes to a number of days or longer, depending on the context, can apply in various situations, including arrival at a job, paying a bill, for meeting government or legal requirement, or in many other situations. [ Grace Periods in the context of Government]

In law, a grace period is a period of time during which a particular rule exceptionally does not apply, or only partially applies. For the grace period in patent law, see novelty (patent).

Types of grace periods

Some companies and organizations do not view one who fulfills an obligation within a grace period any differently. In these situations, a subject who is past due, but who meets the obligation within the grace period receives equal treatment and no penalty or negative reputation.

Other clients may receive a partial, less severe penalty. For example, many utility companies will charge a small late fee for those who do not pay their bill by the stated due date. However, the utility service provider will wait a longer period of time before cutting off service.

Some companies may suspend certain privileges during a grace period. For example, self storage services will often waive a late fee if the rent is not paid for up to several days past the due date, but will deny the tenant access to his/her unit until the bill is paid. [ An extensive tutorial on the types of Grace Period and their implementation]

Advantages and disadvantages

Grace periods can provide some advantages. For example, people who habitually are on time for their obligations, but due to occasional unforeseen circumstances are late on a rare occasion, can avoid a penalty for being late within the grace period and maintain their reputation for timeliness.

However, habitual procrastinators may come to view the grace period as the actual deadline, and if, due to unforeseen circumstances, they are occasionally late beyond that, they might complain about the applied penalty. [ A USA Today article discussing the pros and cons of Grace Period]

Credit cards

In personal finance, a grace period is the period during which no interest is charged on a credit card. See Credit card interest for further information.

A period of time after a payment due date within which the fee can be paid without penalty. For example, late charges may not be incurred for rental payments due on the first of the month if they are paid on or before the 10th of the month. [ Grace Periods in the context of Credit]


ee also

* Late fee
* Turn-off notice
* Grandfather clause
* Sunset clause

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Look at other dictionaries:

  • grace period — grace pe·ri·od n: a period of time beyond a scheduled date during which a required action (as payment of an obligation) may be taken without incurring the ordinarily resulting adverse consequences (as penalty or cancellation): as a: a period of… …   Law dictionary

  • grace\ period — • grace period • period of grace noun the time or extra time allowed in which to do something. Most insurance companies have a grace period of one month for payments. The teacher gave the class a week s period of grace to finish workbooks …   Словарь американских идиом

  • grace period — grace ,period noun count a period of time that someone allows you to have before you must pay money you owe: All invoices are issued with the usual 10 day grace period …   Usage of the words and phrases in modern English

  • grace period —  Period of time until a bill becomes due.  ► “While it is true that distributions from individual retirement accounts (IRA) are not taxed if they are ROLLED OVER to new IRAs within 60 days of receipt, this tax free grace period, which allows an… …   American business jargon

  • grace period — A time period during which a borrower can pay the full balance of credit due and not incur any finance charges (BANKRUPTCY DICTIONARY OF TERMS)/. United Glossary of Bankruptcy Terms 2012 …   Glossary of Bankruptcy

  • grace period — n. extra time allowed, as for payment of a note, insurance premium, etc. after it is due …   English World dictionary

  • grace period — noun : a period of 30 days or one month during which premiums on insurance policies may be paid without penalty * * * a period of time after a payment becomes due, as of a loan or life insurance premium, before one is subject to penalties or late …   Useful english dictionary

  • Grace Period — Infobox Album | Name = Grace Period Type = Album Artist = ApologetiX Released = Recorded = Fall Winter of 2001 Genre = Christian/Parody/Comedy Length = 1:08:45 Label = Parodudes Producer = Karl Messner Reviews = Last album = Keep the Change… …   Wikipedia

  • Grace Period — A provision in most loan and insurance contracts which allows payment to be received for a certain period of time after the actual due date. During this period no late fees will be charged, and the late payment will not result in default or… …   Investment dictionary

  • grace period — UK / US noun [countable] Word forms grace period : singular grace period plural grace periods a period of time that someone allows you to have before you must pay money that you owe All invoices are issued with the usual 10 day grace period …   English dictionary

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