Statute of limitations for a loan without a fixed maturity date

Loans and Their Regulation in the Civil Code

Parties often agree in a contract on when a loan is to be returned (a specific date or an installment schedule). But what happens if no maturity date is agreed upon? For such cases, the law provides special rules. Under Section 2393(1) of the Civil Code, if the contract does not specify when the loan is to be returned, its maturity depends on the termination of the contract. Simply put, until the lender terminates the loan, the debtor does not have to return anything. The law also stipulates that if nothing is agreed regarding termination, the notice period is six weeks. This means that after termination, the debtor has six weeks to return the money.

Limitation Period for the Right to Return a Loan

For monetary claims, a general limitation period of three years applies. Although a creditor who misses this deadline does not lose the claim as such, the court will not award it if the debtor raises a statute of limitations defense – meaning the debtor is no longer obliged to perform. It is therefore crucial to know when the limitation period begins to run so that it is not missed. This moment usually coincides with the maturity of the debt (when the debtor is first obliged to perform). In practice, this is called the maturity of the claim or actio nata – the three-year period typically runs from this moment.

Common Obligations Without an Agreed Maturity Date

For most debts, a simple rule applies – if no time of performance has been agreed, the creditor may demand performance immediately. Under Section 1958(2) of the Civil Code, it is sufficient for the creditor to call upon the debtor to perform, and the debt becomes due without undue delay after this call. In other words, a debt "on demand" is due immediately; there is no need to terminate anything or wait for anything. This regime protects creditors – they can ask for performance without delay – but at the same time, it motivates them to be active.

An inactive creditor risks the statute of limitations because, according to the case law of the Supreme Court, the three-year period begins to run from the very first moment the creditor could have requested performance. The principle of vigilantibus iura scripta sunt – the law favors the vigilant – applies here. A creditor should not let a debt "sit idle" but should act and enforce the debt in time, otherwise they will lose the possibility of judicial protection (see the well-known judgment of the Supreme Court, file no. 31 Cdo 3125/2022).

Loans for an Indefinite Period and the Start of the Limitation Period

Until recently, there was uncertainty (and differing court decisions) as to when the limitation period for the right to return a loan without an agreed maturity date begins to run. There were essentially two approaches:

• According to the first approach, the limitation period was to run from the earliest possible moment the lender could have made the loan due. The lender could terminate the loan as early as the day after the contract was concluded (with the usual six-week notice period). Theoretically, the loan could have been due as early as six weeks after it was provided, and the three-year limitation period would have started running immediately after those six weeks expired, regardless of whether the creditor actually gave notice. Proponents of this approach argued that the opposite interpretation (waiting for actual termination before the limitation period begins) would allow the lender to delay maturity and thus the start of the limitation period "practically indefinitely," which would contradict the purpose of the statute of limitations.

• The second approach was based on the nature of the loan agreement as a long-term relationship for an indefinite period. According to this view, the limitation period cannot begin to run before the creditor takes the necessary legal step – termination – after which the claim for return only arises. Until the loan is terminated, the debt is not due, so there is nothing to enforce in court and the limitation period does not run. This view emphasized that the purpose of the statute of limitations is not to force the creditor to prematurely end a contractual relationship that suits both parties. It further pointed out that the right to terminate a loan, by its very nature, cannot be subject to limitation – it is a right to terminate an existing contract, which the law does not limit in time. It makes no sense for the creditor to lose the right to return as a "punishment" simply because they let the loan continue and did not end it by external intervention.

New Verdict of the Supreme Court: Termination Must Precede the Limitation Period

At the end of April 2025, the Supreme Court finally brought clarity to the matter. The Grand Chamber of the Supreme Court (Extended Chamber), in its decision file no. 31 Cdo 3263/2024 dated April 23, 2025, leaned towards the second of these approaches. The Supreme Court explicitly overruled its earlier judgment file no. 33 Cdo 3037/2019 and similar decisions that forced creditors to "immediately" terminate loans due to the statute of limitations. The new rule is as follows:

• For loans for an indefinite period under Czech legislation, the three-year limitation period begins to run only from the moment the creditor actually terminates the loan and the notice period expires, so that the right to return the loan has matured (become due). In other words, the decisive date is the date when the loan actually ended after the notice period expired, not the first date it could have been terminated. Only from this date does the creditor know they have the right to demand return (because only then does the debtor's obligation to perform arise), and the limitation period is calculated from this date.

• Until the loan is terminated, the debt is not due and the limitation period does not run. The creditor therefore does not lose their right simply because they let the loan run for a longer period – the claim is not "barred by the statute of limitations" by the mere passage of time, unless they neglected something after the notice period expired. The Supreme Court emphasized that during the term of the contract, the obligation is performed as agreed by the parties, and there can be no talk of any neglect of rights by the creditor. The purpose of the statute of limitations is not to force the parties to end a long-term relationship sooner than they themselves wish.

• The right to terminate a loan agreement is not subject to limitation (this was already the case, and the new decision confirms it). It is a constitutive right by which the creditor (or even the debtor) terminates the contractual relationship. It is not a claim, but a unilateral act – the creditor can give notice even after many years, and no time limit restricts them in doing so. If the contract were to remain inactive for an extremely long time, other legal instruments (e.g., good morals) could serve to resolve immoral or harassing situations, but limitation of the termination itself is out of the question.

What Led the Supreme Court to This Decision?

The main reason was the fundamental qualitative differences between the termination of a loan and a simple demand for payment of a debt. The Prague-based Supreme Court analyzed in detail that the termination of a loan for an indefinite period cannot be equated with a demand for performance under Section 1958(2) of the Civil Code. Termination means the end of the contractual relationship – it ends a long-term obligation and transforms it into a one-off obligation to return the loaned item after the notice period expires. In contrast, a demand for performance under Section 1958(2) of the Civil Code does not terminate any contractual relationship; it merely causes an already existing debt to become due.

Another difference is that the right to terminate the contract belongs not only to the creditor but also to the debtor (who can return the money at any time in the case of an interest-free loan). This means that the borrower is not exposed to endless uncertainty because they can terminate the obligation themselves (by returning the money or by giving notice, for example, if they were paying interest).

In short, a loan for an indefinite period is a specific contractual relationship and requires a specific limitation regime. The Grand Chamber of the Supreme Court therefore concluded that the earlier interpretation, which forced the creditor to terminate the loan within three years (or three years and six weeks), was unsustainable – in fact, it negated the meaning of termination and made it an illusory right unless exercised "in time." The new decision, on the other hand, respects the autonomy of the parties' will to keep the relationship open as needed, without depriving the lender of the opportunity to get their money back later.

Consequences for Creditors: What to Watch Out for and How to Avoid the Risk of Losing Your Claim?

For creditors of loans for an indefinite period, the decision of the Supreme Court is good news. It means that if you have lent money to someone without an agreed maturity date, you will not be "punished" for your patience or helpfulness. You will not lose your claim just because you let the debt run for more than three years.

Your right to demand return will not be barred by the statute of limitations until you terminate the loan and the notice period expires. So even if the debtor refuses to return the money after five years, claiming that "it is already barred by the statute of limitations," according to current case law, they are wrong – if no notice was given and the maturity has not expired, the period has not even started to run. Creditors thus have greater legal certainty for long-term loans.

But beware, this does not mean it is advisable to let the loan "sleep" forever! Practical recommendations for creditors remain cautious:

• Keep written security and evidence in mind: The longer the obligation lasts, the harder it is to prove its existence and terms. Remember that after ten years, you may no longer have the documents, witnesses may forget details, etc. Always have a written loan agreement or at least a written confirmation of the provision of money. This also applies to family and friendly loans. The Czech legal team at ARROWS often encounters cases where a client lent money to an acquaintance "on their word" and years later a dispute arose as to whether it was a gift or a loan – these difficulties can be avoided with a clear contract.

• Consider agreeing on a term or repayment plan: If you know you want the money back, for example, within five years, it is better to state this directly in the contract. A fixed maturity date both starts the limitation period from that date and gives both parties clear expectations. With a loan for an indefinite period, you have no specific deadline without termination, which can lead to a false sense that "there is no rush." However, the debtor's situation may worsen over time (they may get into financial difficulties or become insolvent) and the creditor, who has waited a long time, may end up with nothing. A well-drafted contract prevents these risks.

• Monitor your loan over time and communicate with the debtor: Even if you do not have a fixed maturity date, make an internal plan. For example, after a certain period (say, two or three years), re-evaluate whether it is desirable to continue the loan. Is the debtor still able to pay? Has their creditworthiness deteriorated? Is it time to gently ask for return or formally terminate the contract? With an interest-free loan, nothing prevents the debtor from returning the money at any time, so you can motivate them to do so. The important thing is not to lose contact and to have an overview of the situation.

• If you decide to terminate the loan, do so correctly: Termination of a loan agreement must generally be in writing (recommended for evidentiary reasons, even if the law does not explicitly require it for orally agreed loans – but it is always better in writing). In the notice, refer to the contract, the date the money was provided, your intention to terminate the contract, and give the debtor six weeks to return the money (unless you have agreed on a different notice period). The period begins to run on the day the notice is delivered to the debtor, so send it by registered mail or deliver it in another verifiable way. After 6 weeks, the debt is due and the three-year limitation period begins to run – at that point, it is necessary to file a lawsuit if the debtor does not pay voluntarily.

Risk for Debtors

We have mentioned the advantages for creditors, but it is also necessary to mention the opposite point of view – the debtor should not rely on the statute of limitations if they borrowed without a specified maturity date. It is now certain that such a debt will only be barred by the statute of limitations three years after actual termination, so the debtor cannot count on the obligation "fading away" by waiting. If you are in the position of a debtor and have a long-term loan, it is wise to either repay it as soon as possible (especially if it is interest-free) or agree on a clear plan with the creditor. This will avoid an unpleasant surprise when, after many years, you receive a termination notice and have to scramble to find the entire amount.

Conclusion

The issue of limitation periods for loans shows how important it is to have correctly set up contracts and to keep an eye on key deadlines. In our law firm, we often meet clients who almost lost their claims due to unclear contracts or inactivity.

Our lawyers at ARROWS regularly deal with this issue – we monitor current case law (such as the mentioned decision of the Supreme Court) and help clients set up contracts and recovery strategies to prevent the loss of claims due to poorly handled maturity or overlooked termination.

We offer a legal analysis of your contracts – we will check whether there are hidden risks of limitation in your loans or other obligations. We will prepare an individual strategy for you: for example, a schedule of steps on when to assert a claim, when to give notice or file a lawsuit, so that you can be sure you will not lose your rights. We will watch all deadlines for you, monitor them on your behalf, and take the necessary steps in time.

A good contract and vigilance are still the best defense. If you are not sure whether your contracts correspond to the latest legal developments, or if you need help recovering a long-unresolved loan, contact our experts. At ARROWS, we will be happy to help you protect your claims and find the most effective solution – before it is too late.

Your peace of mind is our concern.