Statute of limitations on loans without an agreed maturity date

How long can you wait before you start recovering money from a loan you have provided without an agreed maturity date? And when are you at risk of losing your right to do so due to the statute of limitations? The Supreme Court, in its judgment ref. no. 31 Cdo 3263/2024, has made a fundamental breakthrough and clarification in this area. In this article, I will explain what the decision means, what is specific about loans in terms of the statute of limitations, and how to proceed correctly so that you do not lose your money.

Author of the article: ARROWS (Mgr. Pavel Čech, office@arws.cz, +420 245 007 740)

Loans and their regulation in the Civil Code

The Civil Code uses the term “loan” to describe a relationship in which the lender (creditor) transfers a fungible item – typically money – to the borrower (debtor) for use and return after a period of time in the form of an item of the same type (e.g., the same amount of money). This is therefore a standard loan as we know it in practice. A loan may be interest-bearing (with interest) or interest-free.

The parties often agree in the contract when the loan is to be repaid (specific date or repayment schedule). But what if the repayment period is not specified? In such a case, the law sets 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. In short, until the lender terminates the loan, the borrower does not have to repay 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, the general limitation period is three years. A creditor who misses this deadline does not lose the claim as such, but the court will not grant it upon the debtor's objection – the debtor is therefore no longer required to pay. It is therefore essential to know when the limitation period begins so that it is not missed. This moment usually coincides with the due date of the debt (when the debtor is first required to perform). In practice, this is called the emergence of a claim or actio nata – the three-year period is typically counted from this moment.

Common obligations without an agreed maturity date

For most debts, a simple rule applies – if no performance period has been agreed, the creditor may demand immediate performance. According to Section 1958(2) of the Civil Code, it is sufficient for the creditor to call on the debtor to perform, and the debt becomes due without undue delay after such a call. In other words, “on demand” the debt is due immediately, there is no need to give notice or wait. This regime protects creditors – they can promptly request performance – but at the same time encourages 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 starts from the first moment when the creditor could have requested performance. The principle of vigilantibus iura scripta sunt applies here – the law belongs to the vigilant. The creditor should not let the debt “rot,” but should act and enforce the debt in a timely manner, otherwise they will lose the possibility of judicial protection (see the well-known Supreme Court judgment 31 Cdo 3125/2022).

Loan for an indefinite period and the start of the limitation period

Until recently, there was uncertainty (and differing court decisions) as to when the right to repayment of a loan for which no maturity date had been agreed began to expire. There were basically two approaches:

• According to the first approach, the limitation period should be governed by the earliest possible moment when the lender could have called in the loan. The lender could have terminated the loan on the day following the conclusion of the contract (with the usual six-week notice period). Thus, in theory, the loan could be due as early as six weeks after it was granted, and the three-year limitation period would begin to run immediately after the expiry of those six weeks, regardless of whether the creditor actually gave notice. Proponents of this approach argued that the opposite interpretation (waiting for the actual termination to occur before the limitation period begins) would allow the lender to delay the maturity date and thus the start of the limitation period “practically indefinitely,” which would be contrary to the purpose of the limitation period.
• The second approach was based on the nature of a loan agreement as a long-term relationship for an indefinite period. According to this approach, the limitation period cannot begin to run before the creditor takes the necessary legal step—termination—after which the claim for repayment arises. Until the loan has been 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 limitation period is not to force the creditor to prematurely terminate a contractual relationship that suits both parties. Furthermore, it pointed out that the right to terminate a loan cannot, by its nature, be subject to a limitation period – it is a right to terminate an existing contract, which is not limited in time by law. It makes no sense for the creditor to lose their claim to repayment as a “punishment” simply because they allowed the loan to continue and did not terminate it by external intervention.

New Supreme Court ruling: Termination must precede the limitation period

At the end of April 2025, the Supreme Court finally clarified the matter. The Grand Chamber of the Supreme Court (extended panel) in its decision ref. no. 31 Cdo 3263/2024 of April 23, 2025, upheld the second of the above approaches. The Supreme Court expressly overruled its earlier judgment, file no. 33 Cdo 3037/2019, and similar decisions that required creditors to terminate loans “immediately” due to the statute of limitations. The new rule is as follows:

• For loans for an indefinite period, the three-year limitation period begins to run only from the moment when the creditor actually terminated the loan and the notice period expired, so that the right to repayment of the loan became due. In other words, the decisive date is the date on which the loan actually ended upon expiry of the notice period, not the first date on which it could have been terminated. Only from this date does the creditor know that 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.
• Until the loan has been terminated, the debt is not due and the limitation period does not run. The creditor therefore does not lose his right simply because he allows the loan to run for a longer period of time – the claim does not “lapse” simply by the passage of time, unless he has missed something after the expiry of the notice period. 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 question of the creditor's neglect of rights. The purpose of the limitation period is not to force the parties to terminate a long-term relationship before they themselves wish to do so.
• The right to terminate a loan agreement is not subject to a limitation period (this was already the case and the new decision confirms it). This 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 may give notice even after many years and there is no time limit. If the contract remains inactive for an extremely long period of time, other legal institutions (e.g., good morals) may be used to resolve immoral or harassing situations, but the statute of limitations on termination as such does not apply.

Who at ARROWS can help you with this problem?

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 Supreme Court analyzed in detail that 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 termination of the contractual relationship—it ends a long-term obligation and transforms it into a one-time obligation to return the loaned item after the notice period expires. In contrast, a request for performance under Section 1958(2) of the Civil Code does not terminate any contractual relationship, but only causes an existing debt to become due.

Another difference is that the right to terminate the contract is held not only by the creditor, but also by the debtor (who may 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, as they can terminate the obligation themselves (by returning the money or giving notice if, for example, they were paying interest).

In short, an indefinite loan is a specific contractual relationship and requires a specific limitation period. The Grand Chamber of the Supreme Court therefore concluded that the earlier interpretation requiring the creditor to terminate the loan within three years (or within three years and six weeks) was untenable – in fact, it negated the meaning of termination and made it an illusory right if it was not exercised “in time.” The new decision, on the other hand, respects the autonomy of the parties to keep their relationship open as needed without depriving the lender of the possibility of getting their money back later.

Consequences for lenders: what to watch out for and how to avoid the risk of losing your claim?

For creditors of loans for an indefinite period, 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 accommodating attitude. You will not lose your claim simply because you have allowed the debt to run for more than three years. Your right to demand repayment does not expire until you terminate the loan and the notice period expires. So even if the debtor refuses to repay the money after five years on the grounds that “it is already time-barred,” according to current case law, they are not right—if no notice has been given and the maturity date has not passed, the period has not even begun to run. Creditors thus have greater legal certainty for long-term loans.

Please note, however, that this does not mean that it is advisable to let a loan “sleep” forever! Practical recommendations for creditors remain cautious:

• Think about written security and evidence: The longer the obligation lasts, the more difficult it is to prove its existence and conditions. 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 written confirmation of the provision of money. This also applies to family and friendly loans. ARROWS lawyers often encounter cases where a client lent money to an acquaintance “on trust” and, years later, a dispute arose as to whether it was a gift or a loan—such difficulties can be avoided with a clear contract.
• Consider agreeing on a repayment period or schedule: If you know that you want your money back within five years, for example, it is better to state this directly in the agreement. A fixed repayment date both starts the limitation period from that date and gives both parties clear expectations. With an indefinite loan, you have no specific deadline without notice, which can lead to a false sense of “no rush.” However, the borrower's situation may deteriorate over time (they may run into financial problems or become insolvent), and the lender, who has waited a long time, will ultimately be unable to recover anything. A well-drafted contract prevents these risks.
• Monitor your loan over time and communicate with the borrower: Even if you don't have a fixed repayment date, make an internal plan. For example, after a certain period of time (perhaps two or three years), reassess whether it is desirable to continue the loan. Is the borrower still able to pay? Has their creditworthiness deteriorated? Is it time to cautiously inquire about repayment or formally terminate the agreement? In the case of an interest-free loan, nothing prevents the borrower from returning the money at any time, so you can motivate them to do so. It is important not to lose contact and to keep track of the situation.
• If you decide to terminate the loan, do so correctly: Termination of a loan agreement must generally be in writing (this is recommended for evidentiary reasons, even if the law does not expressly require it for loans agreed verbally – but it is always better to do so in writing). In the notice, include a reference to the agreement, the date the money was provided, your intention to terminate the agreement, and give the borrower six weeks to return the money (unless you have agreed on a different notice period). The period starts from the date the notice is delivered to the borrower, so send it by registered mail or deliver it in another verifiable manner. After 6 weeks, the debt is due and the three-year limitation period begins – 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 worth mentioning the opposite angle – 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 become time-barred three years after the actual termination, so the debtor cannot count on the obligation “expiring” 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 the unpleasant surprise of receiving a notice of termination after many years and having to rush to find the entire amount.

Conclusion

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

Our lawyers at ARROWS routinely deal with this issue – we monitor current case law (such as the aforementioned Supreme Court decision) and help clients draft contracts and enforcement strategies to prevent the loss of claims due to poorly handled maturities or omitted notices.

We offer legal analysis of your contracts – we check whether loans or other obligations have hidden risks of expiry. We will prepare an individual strategy for you: for example, a schedule of steps to take when to assert a claim, when to give notice or file a lawsuit, so that you can be sure that you will not miss your rights. We will notify you of all deadlines, monitor them for you, and take timely action if necessary.

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 recovering a long-outstanding 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.

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