North Carolina § 24-5 - Interest on judgments.

§ 24-5. Interest on judgments.

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. 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. 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. History (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.) Editor's Note. - In 1995, the North Carolina Supreme Court held in Custom Molders, Inc. v. American Yard Products, Inc., 342 N.C. 133 , 463 S.E.2d 199 (1995), that an applications provision in the 1985 session law rewriting this section had the effect of continuing a sentence from the pre-1981 version of subsection (b) that allowed for postjudgment interest on noncontract awards generally, although the General Assembly failed to include the sentence in the 1985 revision. Session Laws 1999-384, s. 1, in part inserted the second sentence in subsection (b), similarly allowing postjudgment interest on noncontract awards. This section, as amended by Session Laws 2003-59, s. 4, effective September 1, 2003, is applicable to all judgments entered, indexed, and docketed on or after that date. Effect of Amendments. - Session Laws 2003-59, s. 4, effective September 1, 2003, and applicable to all judgments entered, indexed, and docketed on or after that date, in subsection (a), added the fifth sentence; in subsection (a1), substituted "entry of judgment under G.S. 1A-1 , Rule 58" for "docketing of judgment"; and in subsection (b), substituted "entry of judgment under G.S. 1A-1 , Rule 58" for "entry of judgment" in the second sentence. Legal Periodicals. - For note, "Baxley v. Nationwide Mutual Insurance Company: A Key Loophole in the Financial Responsibility Act of 1953 Comes to Light," see 72 N.C.L. Rev. 1809 (1994).