Period of limitation for claims against Spanish clients

Is your organization dealing with old invoices which have still not been paid by your Spanish customer? Then you can summon your Spanish client to pay that invoice as yet. A claim does not stay valid forever though. When an invoice is very old, it is possible that, meanwhile, this invoice has exceeded the period of limitation. But when does a claim reach that stage according to Spanish law? And how can you interrupt this period of limitation in Spain, so you can prevent exceeding this period of limitation? This article lends insight into the period of limitation in Spain and interrupting the period of limitation for claims against Spanish debtors.

Alteration Period of Limitation of Claims

Spain has a general period of limitation for invoices. This concerns credit which as arisen from an obligation, for instance the sale of goods. When it concerns particular obligations, which have arisen, for instance, from transport, professional services, financial damages, rent, etc. there are different periods of limitation. The general period of limitation used to be fifteen years, but as of November 2015, this period of limitation was altered to five years. The period of limitation starts the moment the claims becomes exigible, and this is when the agreed upon period of payment has expired. So, five years after the period of payment has expired, this invoice exceeds the period of limitation.

Interrupting the Period of Limitation Pursuant to the Codes

To prevent exceeding the period of limitation, you, the creditor, can interrupt this period of limitation. The statutory period of limitation is then reset to zero again, which means the period of limitation is restarted. How these periods of limitation can be interrupted in Spain is stated both in the Spanish Commercial Code and the Civil Code. Both codes consider a written acknowledgment of the debt as a valid instrument to interrupt the period of limitation. When there is no such acknowledgment, these codes do not quite agree on the interruption of the period of limitation. Pursuant to the Civil Code, sending an extrajudicial reminder is sufficient to interrupt the period of limitation this way. The Commercial Code, however, states that only legal proceedings can interrupt the period of limitation.

Interrupting the Period of Limitation in Practice

Although the Spanish Commercial Code states that only legal proceedings can interrupt the period of limitation, in practice, Spanish case law is milder. Thus, the Spanish High Court, has stated in multiple judgments that an extrajudicial demand letter is sufficient to interrupt the period of limitation. It is essential though that there be proof that the debtor did actually receive the demand letter. The contents of the demand letter will also need to be proved. Particularly the latter can be hard to prove sometimes. In the past, several court cases lead to disappointing results because the contents of the demand letter could not be proved.

Proving the Contents of the Demand Letter by Burofax

So in order to interrupt the period of limitation, it is essential to be able to prove the content of the demand letter. An ordinary demand letter, sent to the debtor by post or by email cannot be considered sufficient, because it is possible to doctor the contents of an email message. That is also why a letter by registered post is insufficient, as a registered envelope which does not contain a letter could conceivably be sent. To counter these problems, Spain has a unique way of sending registered letters, which is by burofax. A burofax not only certifies the receipt of the letter but also the contents of the letter. That is why the Spanish Court considers the use of burofax sufficient evidence of an extrajudicial demand letter.

So if you would like to interrupt the period of limitation by sending a demand letter, then be sure to send this by burofax. If, eventually, the matter would go to Court, then you would definitely be able to prove that the debtor received the demand letter, as well as the contents of this demand letter.

If you have any further questions on this topic, or if you are wondering how we could be of service to you, then please do not hesitate to contact our Spanish department at Bierens European Collection Attorneys. Our Spanish attorneys would be glad to advise you when you are dealing with a Spanish customer who is not paying your invoice.