(a) Actions on Contracts. - In an action for breach of contract, except an action on a penal bond, the amount awarded on the contract bears interest from the date of breach. The fact finder in an action for breach of contract shall distinguish the principal from the interest in the award, and the judgment shall provide that the principal amount bears interest until the judgment is satisfied. If the parties have agreed in the contract that the contract rate shall apply after judgment, then interest on an award in a contract action shall be at the contract rate after judgment; otherwise it shall be at the legal rate. On awards in actions on contracts pursuant to which credit was extended for personal, family, household, or agricultural purposes, however, interest shall be at the lower of the legal rate or the contract rate. For purposes of this section, "after judgment" means after the date of entry of judgment under G.S. 1A-1, Rule 58.
(a1) Actions on Penal Bonds. - In an action on a penal bond, the amount of the judgment, except the costs, shall bear interest at the legal rate from the date of entry of judgment under G.S. 1A-1, Rule 58, until the judgment is satisfied.
(b) Other Actions. - In an action other than contract, any portion of a money judgment designated by the fact finder as compensatory damages bears interest from the date the action is commenced until the judgment is satisfied. Any other portion of a money judgment in an action other than contract, except the costs, bears interest from the date of entry of judgment under G.S. 1A-1, Rule 58, until the judgment is satisfied. Interest on an award in an action other than contract shall be at the legal rate. (1786, c. 253, P.R.; 1789, c. 314, s. 4, P.R.; 1807, c. 721, P.R.; R.C., c. 31, s. 90; Code, s. 530; Rev., s. 1954; C.S., s. 2309; 1981, c. 327, s. 1; 1985, c. 214, s. 1; 1987, c. 758; 1999-384, s. 1; 2000-133, s. 8; 2003-59, s. 4.)
Notes of Decisions
Cited in
193
cases (
22 in the last 5 years), 1944–2026 · leading case:
Brown v. Flowe, 507 S.E.2d 894 (N.C. 1998).
Brown v. Flowe, 507 S.E.2d 894 (N.C. 1998).
· cites it 36× “We do not believe the General Assembly intended either result, and we thus decline to adopt either method. The trial court calculated the prejudgment interest as the General Assembly has directed, that is, on the entire compensatory damages award without subtracting settlements.”
Baxley v. Nationwide Mut. Ins., 538 PA 91 (N.C. 1993).
· cites it 52× “We have previously held that the prejudgment interest statute, N.C.G.S. § 24-5, is not a part of the Financial Responsibility Act so as to be written into every liability policy.”
Lowe v. Tarble, 329 S.E.2d 648 (N.C. 1985).
· cites it 49× “For the same reasons expressed in my dissent in Powe , I conclude that the statute also violates the Due Process Clause of the Fourteenth Amendment to the United States Constitution and the "law of the land" provision (art.”
Lowe v. Tarble, 323 S.E.2d 19 (N.C. 1984).
· cites it 52× “§ 24-5, violates Article I, section 19 of the North Carolina Constitution, the Equal Protection and Due Process Clauses of the Fourteenth Amendment to the Constitution of the United States, and the exclusive emoluments clause contained in Article I, section 32 of the North…”
Powe v. Odell, 322 S.E.2d 762 (N.C. 1984).
· cites it 36× “The statute at issue, N.C.G.S. § 24-5, involves regulation in the area of economics and social welfare; therefore a court's review is limited to whether "the classification's relation to the objectives sought by the General Assembly attains a minimum level of rationality.”
Sproles v. Greene, 407 S.E.2d 497 (N.C. 1991).
· cites it 14× “In Lowe , after determining that N.C.G.S. § 24-5 does not violate due process as provided under the fourteenth amendment, this Court examined the relevant language of the policy in question in that case.”
Jones v. Harrelson & Smith Contractors, LLC, 670 S.E.2d 242 (N.C. Ct. App. 2008).
· cites it 12× “This Court held that pursuant to N.C. Gen. Stat. § 24-5 (a), the trial court properly awarded interest “from the date of breach.”
Palmer v. Duke Power Co., 499 S.E.2d 801 (N.C. Ct. App. 1998).
· cites it 19× “N.C. Gen. Stat. § 24-5 (1991). Section 24-5(b) provides for “the recovery of interest in instances where there has been both a judgment as to liability and a determination of appropriate compensatory damages.”
Thomas M. McInnis & Assocs., Inc. v. Hall, 349 S.E.2d 552 (N.C. 1986).
· cites it 6× “[3] Interest is awarded for a breach of contract pursuant to N.C.G.S. § 24-5. That portion of the statute that applied to this case has since been slightly reworded.”
Nationwide Mut. Ins. v. Mabe, 467 S.E.2d 34 (N.C. 1996).
· cites it 10× “Prejudgment interest is governed by N.C.G.S. § 24-5, which provides in pertinent part: In an action other than contract, the portion of money judgment designated by the fact finder as compensatory damages bears interest from the date the action is instituted until the judgment…”
Driskell v. Summit Contracting Grp., Inc., 325 F. Supp. 3d 665 (W.D.N.C. 2018).
· cites it 9× “Plaintiff contends it is entitled to prejudgment interest of 8% under N.C. Gen. Stat. § 24-5 (b). See also N.C.”
— N.C. Gen. Stat. § 24-5(a) — 19 cases
Baxley v. Nationwide Mut. Ins., 538 PA 91 (N.C. 1993).
“We have previously held that the prejudgment interest statute, N.C.G.S. § 24-5, is not a part of the Financial Responsibility Act so as to be written into every liability policy.”
— N.C. Gen. Stat. § 24-5(a)(b) — 1 case
— N.C. Gen. Stat. § 24-5(b) — 53 cases
Brown v. Flowe, 507 S.E.2d 894 (N.C. 1998).
“We do not believe the General Assembly intended either result, and we thus decline to adopt either method. The trial court calculated the prejudgment interest as the General Assembly has directed, that is, on the entire compensatory damages award without subtracting settlements.”
Baxley v. Nationwide Mut. Ins., 538 PA 91 (N.C. 1993).
“We have previously held that the prejudgment interest statute, N.C.G.S. § 24-5, is not a part of the Financial Responsibility Act so as to be written into every liability policy.”
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