Invoices become time-barred at a certain period. This means that at a certain period, you can no longer enforce payment through legal action. That is why you should always keep a close eye on the limitation period.
A practical example
Business claims in Germany are often subjected to a period of 3 years. The limitation period in Germany commences at the end of the year the claim arises.
Suppose you deliver goods to a customer. On 1 April 2017, you send the corresponding invoice, with a payment term of 30 days. Your customer subsequently fails to pay. The due date of the invoice is 1 May 2017. The limitation period then begins on 31 December 2017 and lasts for 3 years. On 31 December 2020, your invoice is therefore time-barred.
Interrupting the German limitation period
You can prevent the limitation period of your invoice by interrupting it. By interrupting the limitation period, you put the limitation period on hold. In Germany, the limitation period can only be interrupted by starting legal proceedings.
Exceptions to the limitation period
The limitation period of 3 years applies to regular business claims. However, the limitation period in Germany may differ according to different areas of law. For example, under transport law, claims have a limitation period of 1 year throughout Europe.
Under German law, different limitation periods may also apply. For example, in the case of labour contracts that involve the production and maintenance of goods, the limitation period of 2 years applies. On the other hand, in the case of construction contracts relating to buildings, a limitation period of 5 years applies. With different limitation periods, is it best to consult a specialist who can explain the conditions that hold according to your case.
Limitation periods are not always as straightforward in Germany. If you would like to know what this means for your case or how you can interrupt the limitation period, feel free to contact our German debt collection lawyers.