Prejudgment Interest on a Florida Contract Judgment: What Businesses Should Know

The Short Answer: Interest Can Run Before and After Judgment

Yes. Postjudgment interest covers the time after entry, until the judgment is paid.

Each period has its own start point and its own rate rules. The judgment amount alone doesn’t show the full interest picture.

Whether a court awards prejudgment interest in a given case depends on the facts. This guide explains the rules in plain terms. It doesn’t predict how a judge will rule on any claim.

Business owners often see one number on a judgment and assume it’s the final total. Check what the judgment says about interest before you plan around any figure.

Postjudgment Interest Under Florida Statute 55.03

Postjudgment interest follows Fla. Stat. § 55.03. The Chief Financial Officer sets the rate each quarter. The rate comes from a 12-month average of the Federal Reserve Bank of New York discount rate, plus 400 basis points.

The rate is set when the judgment is obtained. It adjusts each January 1 under the rate in effect that day, except for clerk-entered judgments under sections 55.141, 61.14, 938.29, and 938.30, which are not adjusted annually. Interest keeps accruing until the judgment is paid, so the balance can grow while the debt sits unpaid.

Every money judgment must show the interest rate on its face. Judgments entered by the clerk under sections 55.141, 61.14, 938.29, and 938.30 are not adjusted annually.

Where interest runs without a special contract rate, the statutory rate applies. Fla. Stat. § 687.01 says that rate is the one in § 55.03. Don’t assume a single number applies from start to finish.

Prejudgment Interest on Liquidated Contract Sums

A liquidated sum is a fixed, agreed amount, such as an unpaid invoice with a set price. These claims are often easier to pin down than claims where a judge must work out the amount.

Florida recognizes the account stated claim. It requires proof of an agreement between parties who have had earlier transactions, fixing the amount due, and a promise to pay it. The Second District’s account stated ruling sets out that test.

Contract interest terms matter. Section 55.03 says nothing in it affects a rate set by written contract. A signed agreement with an interest rate can therefore shape the period before judgment.

Florida law still sets limits. Fla. Stat. § 687.02 declares contracts usurious when interest runs above the equivalent of 18 percent per year simple interest. Larger loans over $500,000 follow a different rule.

Damages a judge or jury must still figure out are handled differently. The start date often becomes a point of dispute.

Prejudgment Versus Postjudgment Interest Side by Side

Here is how the two periods compare:

The total interest is the sum of the two periods. One rate doesn’t cover the whole timeline.

How to Calculate Judgment Interest by Period

Start with the entered judgment. Note the judgment date, the principal, any prejudgment amount, and the rate printed on the judgment.

Next, split the timeline into periods. Start a new period whenever the rate changes. For a judgment governed by § 55.03, that includes each January 1.

For each period, multiply the balance by the annual rate. Then multiply by the number of days and divide by 365. Add the periods together. This is a common way to estimate, so check your result against the judgment.

Track payments by date. A payment lowers the balance, so interest after that date runs on the smaller amount. Apply payments the way the judgment or the parties require.

An online calculator can run these segments quickly. Check its output against the entered judgment and the published rates before you rely on it.

Common Mistakes That Change the Amount Owed

• Wrong start date. Postjudgment interest runs from the date the judgment is entered, not the invoice date or the filing date.
• One rate for the whole period. The rate adjusts each January 1, so a single figure can overstate or understate the total.
• Missing partial payments. Each payment reduces the balance that interest is figured on.
• Assuming every part carries interest. Check the judgment’s wording for each component.
• Mixing up rates. A contract rate and the statutory rate are different things. The statutory rate applies only where no special contract rate exists.

Where a Defense or Contract Term Can Affect the Interest Claim

Interest follows the underlying debt. If the contract obligation is reduced or set aside, interest on that obligation can change too.

Rescission for a mutual mistake is limited. The appellate ruling on mutual mistake says it applies only when the mistake is mutual and concerns the essence of the contract.

Florida also allows rescission for a unilateral mistake in limited circumstances, as the Third District’s en banc decision explains.

A court can refuse to enforce an unconscionable term. The Florida Supreme Court’s Basulto decision requires both procedural and substantive unfairness, weighed together.

The QBE decision holds that this covenant can’t override the contract’s express terms.

Next Steps If Your Company Holds or Owes an Unpaid Judgment

You may be reading this because your company received a judgment or must pay one. Someone else may have set the timeline, and you may still be gathering facts.

Useful records include the entered judgment, the contract’s interest or late-payment terms, the underlying invoices, and a payment log with dates and amounts.

Eduardo A. Maura is the responsible lawyer for this page. Ayala Law PA’s office is at 1646 W Snow Ave in Tampa, and the firm represents businesses in Tampa and Hillsborough County. The firm handles business and contract disputes for clients in Tampa, Hillsborough County, and the wider Tampa Bay area.

This page is general information, not legal advice. No particular result is promised, and these rules may not apply the same way in every case.

Frequently Asked Questions