Teenform Associates, L.P. (Teenform) (defendant) owned commercial properties subject to mortgages held by Westmark Commercial Mortgage Fund IV (Westmark) (plaintiff). The promissory note provided for monthly installment payments by Teenform and a late charge of six percent of any overdue amount. The note also provided that if full payment was not received on the maturity date or acceleration date, the note’s interest rate would increase by two percentage points, from eight percent to ten percent. Teenform fell behind on its payments. Westmark imposed the six-percent late charge and the ten percent interest rate. Westmark also commenced foreclosure proceedings. Teenform argued that the late charge and increased interest rate were unreasonable. The trial court found that each was reasonable and entered a final judgment of foreclosure. Teenform appealed.