Statute of limitations for a loan without a fixed maturity date

Loans and Their Regulation in the Civil Code

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

Statute of Limitations for the Right to Repayment of a Loan

For monetary claims, a general limitation period of three years applies. A creditor who misses this deadline does not lose the claim itself, but a court will not grant it if the debtor raises an objection—meaning the debtor is no longer obliged to perform. It is therefore crucial to know when the limitation period begins to run to avoid missing it. 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 starts from this moment.

Common Obligations Without an Agreed Maturity Date

For most debts, a simple rule applies—if no time for performance was agreed, the creditor can demand performance immediately. According to 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. This regime protects creditors—they can demand performance without delay—but it also 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 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 "lie dormant" but should act and enforce the debt in a timely manner, otherwise they will lose the possibility of judicial protection (see the well-known judgment of the Supreme Court, file no. 31 Cdo 3125/2022).

Indefinite-Term Loans and the Commencement of the Limitation Period

Until recently, there was uncertainty (and conflicting court decisions) about when the statute of limitations begins to run for the right to repayment of a loan for which no maturity date was agreed. There were essentially two approaches:

• Under the first approach, the running of the limitation period was to be governed by the earliest possible moment the lender could have called the loan. The lender could have terminated the loan agreement as early as the day after the contract was concluded (with the usual six-week notice period). Theoretically, the loan could have become due just six weeks after it was provided, and the three-year limitation period would have started to run immediately after those six weeks, 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 starts) 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, indefinite relationship. According to this view, the limitation period cannot begin to run before the creditor takes the necessary legal step—termination—after which the right to repayment arises. As long as the loan is not terminated, the debt is not due, so there is nothing to enforce in court, and the limitation period does not run. This perspective emphasized that the purpose of the statute of limitations is not to force a creditor to prematurely terminate a contractual relationship that suits both parties. It also pointed out that the right to terminate a loan cannot, by its nature, be subject to a statute of limitations—it is a right to end an existing contract, which the law does not time-limit. It makes no sense for a creditor to lose the right to repayment as a "penalty" just because they allowed the loan to continue and did not terminate it through external intervention.

New Supreme Court Ruling: Termination Must Precede the Statute of Limitations

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 of April 23, 2025, sided with the second of the aforementioned 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 indefinite-term loans, the three-year limitation period begins to run only from the moment the creditor actually terminates the loan and the notice period has expired, so the right to repayment of the loan has matured (become due). In other words, the decisive date is 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 repayment (because only then does the debtor's obligation to perform arise), and the limitation period is calculated from this date.

• As long as the loan is not terminated, the debt is not due, and the limitation period does not run. The creditor, therefore, does not lose their right just because they let the loan run for a longer period—the claim does not become "statute-barred" merely by the passage of time, provided they have not neglected anything after the notice period has expired. The Supreme Court emphasized that for the duration of the contract, the obligation is being performed as the parties agreed, and there can be no question of any neglect of rights by the creditor. The purpose of the statute of limitations is not to force parties to terminate a long-term relationship sooner than they themselves wish.

• The right to terminate a loan agreement is not subject to a statute of limitations (this was already the case, and the new decision confirms it). It is a formative right by which the creditor (or 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 this. If a contract were to remain inactive for an extremely long time, other legal institutes (e.g., good morals) could be used to address immoral or vexatious situations, but a statute of limitations on 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 terminating a loan and a simple demand for payment of a debt. The Supreme Court analyzed in detail that terminating an indefinite-term loan cannot be equated with a call for performance under Section 1958(2) of the Civil Code. Termination means ending the contractual relationship—it concludes a long-term obligation and transforms it into a one-time duty to return the borrowed item after the notice period expires. In contrast, a call for performance under Section 1958(2) of the Civil Code does not terminate any contractual relationship; it merely causes an 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 the borrower is not exposed to endless uncertainty, as they can terminate the obligation themselves (by repaying the money or by giving notice, for example, if they were paying interest).

In short, an indefinite-term loan is a specific type of contractual relationship and requires a specific statute of limitations regime. The Grand Chamber of the Supreme Court, therefore, concluded that the previous interpretation, which forced creditors to terminate a loan within three years (or three years and six weeks), was unsustainable—it effectively negated the purpose of termination and made it an illusory right if not 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 ability to get their money back later.

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

For lenders of indefinite-term loans, the Supreme Court's decision 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 accommodation. You will not lose your claim just because you let the debt run for more than three years.

Your right to demand repayment will not become statute-barred until you terminate the loan and the notice period expires. So, even if a debtor refuses to return the money after five years, claiming that "it's already statute-barred," according to current case law, they are wrong—if no termination was given and the maturity date has not passed, the limitation period has not even begun to run. Lenders thus have greater legal certainty for long-term loans.

But be careful, this does not mean it is advisable to let a loan "sleep" forever! Practical recommendations for lenders remain cautious:

• Think about written security and evidence: The longer an 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 loans between family and friends. The lawyers at ARROWS often encounter 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 a repayment plan: If you know you want the money back within, say, five years, it is better to state this directly in the contract. A fixed maturity date not only triggers the limitation period from that date but also gives both parties clear expectations. With an indefinite-term loan, you have no specific deadline without termination, which can lead to a false sense of "no rush." However, the debtor's situation may worsen over time (they may run into financial trouble or become insolvent), and a creditor who waits too long 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 (perhaps 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 inquire about repayment or formally terminate the contract? With an interest-free loan, nothing prevents the debtor from repaying 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 it correctly: Termination of a loan agreement must generally be in writing (recommended for evidentiary purposes, although the law does not explicitly require it for orally agreed loans—it is always better in writing). In the notice, refer to the contract, the date the money was provided, state your intention to terminate the contract, and give the debtor six weeks to repay 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 perspective—a debtor should not rely on the statute of limitations if they have borrowed money without a specified maturity date. It is now certain that such a debt will only become statute-barred three years after actual termination, so the debtor cannot count on the obligation "expiring" with time. If you are in the position of a debtor with a long-term loan, it is wise to either repay it as soon as possible (especially if it is interest-free) or to agree on a clear plan with the creditor. This will help you avoid the unpleasant surprise of receiving a termination notice after many years and having to find the full amount on short notice.

Conclusion

The issue of the statute of limitations for loans shows how important it is to have properly drafted contracts and to keep track of key deadlines. In our law firm, we often meet clients who have almost lost their claims due to unclear contracts or inaction.

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

We offer a legal analysis of your contracts—we will check whether your loans or other obligations contain risks related to the statute of limitations. We will prepare a customized strategy for you: for example, a schedule of steps on when to assert a claim, when to give notice or file a lawsuit, to ensure you do not lose your rights. We will keep track of all deadlines for you, monitor them, and take the necessary steps in a timely manner.

A good contract and vigilance are still the best defense. If you are unsure whether your contracts comply with the latest legal developments, or if you need help enforcing 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's too late.

Your certainty is our concern.