A fundamental characteristic of limitation is that, with the passage of time, the creditor’s right to legally demand the fulfilment of a (contractual) debt from the debtor expires. The obligation itself does not cease to exist, but it can no longer be legally enforced. In legal proceedings, the court does not consider limitation on its own initiative; it must be raised as a defence by the party concerned. If the debtor does not invoke limitation, the court is not allowed to consider it and must decide on the matter as it would on any other claim. The consequence of limitation is that the debtor can no longer be compelled to fulfil the obligation against their will—legal protection is no longer effective. The creditor’s right still exists, but it becomes unenforceable.¹⁹⁹

Limitation occurs when the legally prescribed period in which the creditor could have demanded the fulfilment of the obligation has elapsed. The limitation period begins to run on the day after the creditor had the right to demand performance or the day after the debtor acted against the obligation if the obligation was to refrain from doing something or to tolerate something.

Example:

A and B enter into a contract stating that B will repay A €2,000, which A had lent him, on 31 December 2012 . The limitation period begins on 1 January 2013.

A and B agree that A will build a holiday home for B. A is to start construction on 1 March 2012, and finish by 1 October 2012. The limitation period begins on 2 October 2012.

Length of limitation periods:

• 5 years – general limitation period,
• 3 years – applies to instalment payments of principal, claims arising from commercial contracts, rent (leasing), etc.,
• 1 year – applies to household claims,
• 10 years – applies to claims recognised by a court (or another state authority).

Interruption of limitation means that the limitation periods begin anew. Limitation is interrupted by:

• Acknowledgment of the debt – Limitation is interrupted when the debtor acknowledges the debt. This can be done directly, with a statement to the creditor, or indirectly, for example, by making a partial payment, paying interest, or providing security.
• Filing a lawsuit – Limitation is interrupted when the creditor files a lawsuit or takes any other action against the debtor before a court or another competent authority to establish, secure, or collect the claim.

A written reminder does not interrupt limitation.

In contrast to limitation, preclusion results in the expiration of the right itself, along with the legal claim for judicial protection. Once the preclusion period has passed, the precluded right ceases to exist.²⁰⁰

Exercise:

A performed work for B under a service contract. B did not pay for the work. After six years from the due date of the claim, A demands payment from B.

• Will A be able to succeed with the claim?
• What if B invokes the defence of limitation?
• Did A’s reminders to B regarding payment interrupt the limitation period?
• B makes the payment but later realises the claim was already time-barred. Can he demand the repayment of the amount?²⁰¹