
Suppose: your customer has not paid an invoice. You send reminders, but without result. Time passes, a new financial year begins, and the claim fades from view. After some time, you look again at the outstanding item and wonder: can I still collect this claim? The answer to this question depends on whether the claim has now become time-barred. Read below what limitation means and when your claim expires.
Limitation means that a claim cannot be enforced in court after a certain period has passed. In other words: if you do not take action within a certain period to, for example, collect your claim or claim damages, you lose the right to bring a claim before the court. The idea behind this is that after some time, legal certainty must arise – old claims should not continue to exist indefinitely.
The law contains various limitation periods, depending on the type of claim. The general rule is that a claim expires after 20 years. There are many exceptions to this. In most cases, a claim expires after only 5 years. This is, for example, the case with:
In addition to these cases, there are various other different limitation periods.
In most cases, limitation can be prevented by interrupting the period. Interruption means that the running limitation period is broken. Interruption occurs by bringing an action before the court or another act of legal pursuit, by a written demand, by an unequivocal written statement in which the creditor reserves the right to performance, or by acknowledgment of the right by the debtor. The way in which interruption must occur depends on the claim. For a claim for performance of an obligation under an agreement, a written demand or statement is sufficient. For other legal claims, this written demand or statement must be followed within 6 months by bringing an action before the court or another act of legal pursuit. By interrupting the limitation period, a new limitation period begins, with a total maximum of 20 years.
Limitation seems like an abstract legal concept, but in practice it has major consequences. As an entrepreneur, you can lose your right to bring a claim simply by the passage of time. Do you have questions about the subject of limitation, want to know whether your claim is (almost) time-barred, or need help drafting an interruption letter? Then feel free to contact Jarno de Graaf, Corporate Law attorney.
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