Imagine this. You lend someone money, and they do not get around to paying it back. You remind them several times, but they still do not get around to it, they just keep promising, and in the end you decide it is not worth it to you. You tell yourself that you have lost both a friend and your money, and you stop pursuing it. However, you can also claim payment of your debt through the courts. And what if the debt has already become time-barred? Even then it can be dealt with, and our article will explain how.
What is a limitation period?
The limitation period (promlčení) for a debt is an institute of private law that weakens the creditor’s right to enforce a claim, as a result of the limitation period expiring without being used. The creditor’s right does not disappear completely, but if the debtor raises the limitation period as a defence in court, the court will not grant the creditor the time-barred claim. However, if the debtor does not raise the limitation defence, the court will rule in the creditor’s favour. The institute of limitation increases legal certainty for debtors in the Czech Republic.
Limitation period
The general limitation period under the Civil Code (občanský zákoník) is 3 years. Its start is determined either objectively, as the day on which the right could first have been exercised (for example, in court), or subjectively, as the day on which the party became aware of the right. The subjectively determined limitation period applies mainly to the right to the return of unjust enrichment and to the right to compensation for damage.
The running of the limitation period does not have to be continuous. The limitation period may start running later, or may not end after 3 years, or the limitation period may be suspended or interrupted. All these circumstances have their own specifics and are not a matter of the debtor’s or the creditor’s decision, but every break in the continuous running of the limitation period has statutory reasons behind it.
The debtor can also acknowledge their debt towards the creditor. In this case, or if the court rules in the creditor’s favour, a new limitation period starts running. This new limitation period is 10 years.
A ten-year limitation period also applies to other legal claims, such as claims arising from unjust enrichment, from the right to compensation for damage, from property rights, or from rights entered in a public register (for example, the Land Register, katastr nemovitostí).
Limitation of a debt
If it is an ordinary debt, for example when you borrow money from an acquaintance, the limitation period is always 3 years. During this time, the creditor can file a lawsuit. The limitation period does not run while the court proceedings are ongoing. In this case, the limitation period is suspended, meaning it starts running again once the court proceedings have ended.
However, if the creditor realises after 3 and a half years that they have an unpaid claim, they can still pursue this debt in court. The right is already time-barred, but the court will still deal with the lawsuit. However, if the debtor objects that the right is already time-barred, the court will not rule in favour of the claim. But if the debtor does not raise this objection in court and the creditor is in the right, the court will rule in favour of the claim.
After the court decides on the lawsuit, a new limitation period starts running, which lasts 10 years.
Performance of a time-barred debt
A debtor can pay of their own accord even after the limitation period has expired. In this case, the creditor no longer files a lawsuit, as they often decide it is not worth it. But the debtor suddenly comes to their senses and sends the creditor the amount owed. In this case, it is proper performance, and even though the claim is time-barred, the debtor is not entitled to get back what they paid. This is not a case of unjust enrichment.
Forfeiture (prekluze)
The institute of forfeiture (prekluze) is also linked to the institute of limitation. While limitation weakens the creditor’s claim to enforce the debt, forfeiture is the absolute extinction of the right and the complete extinction of the claim.
Once forfeiture has occurred, your claim can no longer be enforced in any way. In essence, this claim no longer exists once forfeiture has occurred, so if the debtor were to pay after forfeiture, it would be unjust enrichment. Unlike limitation, the court takes forfeiture into account automatically. However, you do not need to worry that your “ordinary” claim will cease to exist completely. Only those property rights for which the law expressly provides are subject to forfeiture. A typical example is the time limit for making a claim on purchased goods.
What is not subject to limitation?
In general, the Civil Code provides that all property rights are subject to limitation, unless the law provides otherwise. For other rights, however, the opposite applies, these rights are not subject to limitation, unless the law provides otherwise. Ownership rights, the right to seek the division of jointly owned property, the right to establish a necessary easement, and the right to redeem a real burden are not subject to limitation. The law expressly mentions the right to maintenance, which is not subject to limitation, although its individual instalments are.
In the case of personal rights (the right to life and dignity, name, health, and so on), only the rights to redress for harm caused to these rights are subject to limitation.
In conclusion
If you have a claim against someone, I definitely recommend enforcing it sooner rather than later. The general limitation period is 3 years, and in special cases set out in the law it is 10 years. However, if you are not sure what to do, I recommend turning to a lawyer. You can find a list of them on the website of the Czech Bar Association (Česká advokátní komora, ČAK).