(a) The compensation for forbearance of property loaned at a fixed valuation, or for money, shall, in the absence of any agreement to the contrary, be at the rate of eight per cent a year; and, in computing interest, three hundred sixty days may be considered to be a year.
(b) Unless otherwise provided by agreement, interest at the legal rate from the date of maturity of a debt shall accrue as an addition to the debt.
(1949 Rev., S. 6776; 1971, P.A. 783, S. 1; P.A. 79-364, S. 1; P.A. 15-14, S. 8.)
History: 1971 act added new Subsec. (b) providing that interest shall accrue as an addition to the debt; P.A. 79-364 changed rate of interest from 6% to 8% in Subsec. (a); P.A. 15-14 made a technical change in Subsec. (a).
Allowed because of contract express or implied or as damages. 22 C. 392; 72 C. 705. Note “with fifteen per cent after maturity”; the per cent held to be interest and not damages. 42 C. 524. Effect of validating act subsequently repealed on usurious contract for interest. Id., 574; 56 C. 214. A note on which the interest is payable quarterly at the legal rate is not usurious. 44 C. 494. The law takes note of the running of interest at the legal rate where the principal is due. 56 C. 114. The taking of interest in advance on a demand note constitutes an agreement to forbear for that time. 63 C. 87. Generally, any rate agreed on is lawful. 76 C. 388. Agreed rate governs till default, then legal rate; exceptions. 78 C. 323. Effect of insolvency of bank on its liability to pay interest. 88 C. 206. Cited. 126 C. 461; 147 C. 225. An agreed interest rate will prevail over the stated rate in statute. 160 C. 534. Cited. 177 C. 149; 186 C. 612; 188 C. 316. Postmaturity interest continues to accrue at the legal rate on the unpaid balance of the loan even after entry of judgment and until outstanding balance is paid in full, unless the parties agree otherwise. 315 C. 433.
Cited. 13 CA 330; 15 CA 718; 44 CA 402. Statute not applicable where there is a wrongful detention of funds and no forbearance. 109 CA 691.
Cited. 10 CS 240. Statutory rate of interest does not apply unless there is an expressed or implied agreement to pay interest. 29 CS 114. Cited. 38 CS 610; 41 CS 538.
Notes of Decisions
Ballou v. Law Offices Howard Lee Schiff, 39 A.3d 1075 (Conn. 2012).
· cites it 67× “I agree with the majority's conclusion that General Statutes § 37-3a does not provide for the automatic award of interest when a court enters an installment payment order pursuant to General Statutes § 52-356d. I write separately for two reasons.”
Sosin v. Sosin, 14 A.3d 307 (Conn. 2011).
· cites it 11× “9 General Statutes § 37-1 provides in relevant part: “(a) The compensation for forbearance of property loaned at a fixed valuation, or for money, shall, in the absence of any agreement to the contrary, be at the rate of eight per cent a year .”
Sosin v. Sosin, 952 A.2d 1258 (Conn. App. Ct. 2008).
· cites it 16× “The defendant claims that the court improperly (1) awarded her interest under General Statutes § 37-1 instead of General Statutes § 37-3a and (2) failed to award such interest on all of the moneys to which it applied from the date that the defendant was obligated to have made…”
State v. Lex Assocs., 730 A.2d 38 (Conn. 1999).
· cites it 12× “A The trial court awarded prejudgment interest to Lex in the amount of 8 percent from October 15,1990, calculated on a declining basis as payments were made until the date when the balance had been paid in full.”
Reynolds v. Ramos, 449 A.2d 182 (Conn. 1982).
· cites it 4× “Under General Statutes § 37-1 (b), “[ujnless otherwise provided by agreement, interest at the legal rate from the date of maturity of a debt shall accrue as an addition to the debt.”
Am. First Fed., Inc. v. Gordon, 164 A.3d 776 (Conn. App. Ct. 2017).
· cites it 5× “3d 228 (2015), the court distinguished between General Statutes § 37-1, which relates to interest for money loaned (interest eo nomine), and General Statutes § 37-3a, which deals with interest recoverable as damages for the detention of money postmaturity. The court concluded…”
Cadle Co. v. Ogalin, 167 A.3d 402 (Conn. App. Ct. 2017).
· cites it 6× “Finally, the court addressed the claim that postjudgment interest accrued from the 1994 judgment at the original contract rate of 9.75 percent. The defendant had countered that genuine issues of material fact existed as to whether the plaintiff was entitled to such interest.”
Cheshire Mortg. Serv., Inc. v. Montes, 612 A.2d 1130 (Conn. 1992).
· cites it 2× “General Statutes § 37-1 (a). I also disagree with part IV of the majority decision which holds that there was no violation of CUTPA as a result of the loan transaction being unconscionable.”
Ruscito v. F-Dyne Elec. Co., 411 A.2d 1371 (Conn. 1979).
· cites it 4× “At the time of the instant transaction, General Statutes § 37-1 provided: “The compensation for forbearance of property loaned at a fixed valuation, or for money, shall, in the absence of any agreement to the contrary, be at the rate of six per cent a year; and, in computing…”
Cadle Co. v. D'addario, 26 A.3d 682 (Conn. App. Ct. 2011).
· cites it 6× “interest as provided by chapter 673 [General Statutes § 37-1 et seq.] on the money judgment .”
In Re Connaught Props., Inc., 176 B.R. 678 (Bankr. D. Conn. 1995).
· cites it 5× “Conn.Gen.Stat. Ann. § 37-1 (West 1987) provides in relevant part: (a) The compensation for forbearance of property loaned at a fixed valuation, or for money, shall, in the absence of any agreement to the contrary, be at the rate of eight per cent a year.”
— Conn. Gen. Stat. § 37-1(a) — 2 cases
Ballou v. Law Offices Howard Lee Schiff, 39 A.3d 1075 (Conn. 2012).
“I agree with the majority's conclusion that General Statutes § 37-3a does not provide for the automatic award of interest when a court enters an installment payment order pursuant to General Statutes § 52-356d. I write separately for two reasons.”
— Conn. Gen. Stat. § 37-1(b) — 3 cases
Cadle Co. v. Ogalin, 167 A.3d 402 (Conn. App. Ct. 2017).
“Finally, the court addressed the claim that postjudgment interest accrued from the 1994 judgment at the original contract rate of 9.75 percent. The defendant had countered that genuine issues of material fact existed as to whether the plaintiff was entitled to such interest.”
Ballou v. Law Offices Howard Lee Schiff, 39 A.3d 1075 (Conn. 2012).
“I agree with the majority's conclusion that General Statutes § 37-3a does not provide for the automatic award of interest when a court enters an installment payment order pursuant to General Statutes § 52-356d. I write separately for two reasons.”
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