Prescription and Limitation are used indistinctly in the colloquial language. However, the difference between both concepts in the legal world is really meaningful.
Prescription and Limitation. Concept:
Prescription: Legal concept according to which the passage of time consolidates factual situations. It allows the extinction of rights (extinctive) or the acquisition of foreign property (release – usucapion)
Limitation: Extinction of a right due to the passage of time conferred for its exercise.
Prescription and Limitation are analyzed with a special emphasis in a habitual process of Due Diligence, and more specially in the Reps and warranties (R&W) section whenever you want either to acquire or sell a company.
Prescription and Limitation. General Differences.
Rulings on November 29th 2004 by the Provincial Court of Malaga (Secc5) and December 29th 2009 by the Provincial Court of Las Palmas (Secc4) perfectly define the differences between one and the other.
Both concepts represent the importance of the passage of time in legal relations.
The prescription of the actions constitutes a way of extinguish the rights due to the inaction of the holder of that right. It requires for its admission:
- The presence of an exercisable right by a person, either natural o legal person;
- The lack of exercise from the person concerned and;
- The succession of a determined time span determined by the law.
The limitation occurs when, either the law or the individuals, agree on a fixed deadline for the duration of a right. Beyond that time, that right cannot be exercised.
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The aim of the prescription is to extinguish a right that it supposedly abandoned by its holder. The limitation fixes beforehand the time during which a right is susceptible of being usefully exercised.
The prescription has a subjective nature that the Limitation, based, solely, on a temporal deadline, does not need.
Finally, the prescription specifies that it has to be enforced trough an exception, opposed by the defendant. The Limitation, due to the fact that it operates the extinction of the right automatically, it can be assessed ex officio by the judge. Therefore, the first one allows an interruption and a resignation, whereas in the second one, none of these causes have an influence.
Summary table about the differences:
|Effect||The prescription extinguishes the action, but not the right. The payment done when the right has prescribed is valid, but the right is not extinguished.||The limitation extinguishes both the right and the action. The payment done by the debtor when the right´s period of limitation has elapsed is an undue payment.|
|Deadline||Long, counted in years.||Short, Medium and Long.|
|Interruption||It can be interrupted by sending requests.||It cannot be interrupted.|
Civil Law Cases
Prescription is regulated in the articles 5 and 1961-1968 of the Civil Code. As it was mentioned in the beginning, it is a period of time to extinguish rights or acquire property.
Depending on its term, the deadlines for the prescription of the actions are the followings:
|30 years||Art. 1963 CC: The rights in rem in immovable property prescribe after 30 years. Notwithstanding anything to the contrary for the acquisition of the domain or the rights in rem by prescription in arts. 1957 and 1959 CC.|
|20 years||Art. 1964 CC: Foreclosure.|
|6 years||Art. 1962 CC: The rights in rem of movable property prescribe 6 years after the loss of its possession. Unless the holder has won by less term the domain according to article 1955 CC. And unless the cases of loss, public sale, theft or robbery.|
They are divided in:
– Actions of article 1964.2 CC: Personal actions of all kinds, which are not subject to any prescription period, taking into account that in the continuing obligations to do or not to do, the deadline will start every time they are breached (art 1964.2 CC)
This deadline was 15 years until the last reform of the Code of Civil Procedure, Law 19/15. In order to know which deadline must be applied, you must look when the obligation was born
– Actions of article 1966 CC: The actions to demand the fulfilment of the following actions:
|Actions of obligations stablished in Article 1967 CC. That article includes what it is now known as payments for “service or work” in opposition to the buying and selling of something. Nevertheless, as it can be appreciated, the terminology used has not been modified since the XIX century.|
|1 year||Article 1968 CC: They prescribed after 1 year:|
Article 1969 CC. Except for any special provision that says otherwise, it starts to count from the date since those actions were exercisable.
The fixation of the “dies a quo” has generated a lot of case law, as it is considered the moment from which it starts to run the prescription deadline:
- In the action for damages: Usually according the Supreme Court, it begins since the damaged knows the scope and extension of the damages.
- Personal Actions: From the moment in which the respective credit was unsatisfied. It requires that the creditor is in conditions of claiming its right when it is fully aware of the existence, content, scope and effects.
- In Actions for the exercise of obligations declare in a Judgment: The time begins in the date of when the judgment turned definitive.
- Regarding Actions for the rendering of accounts: It starts from the moment when those who had to render them were ceased.
- Actions for the result of the accounts: The time begins from the date on which the result was recognized by agreement of the interested parties.
Article 1973 CC. The prescription is interrupted by its exercise in court, out-of-court claims, and any other act of recognition of the debtor.
Limitation in Civil Actions
Limitation is not regulated in the Civil Code. It emanates for the law, or due to an agreement between individuals indicating the duration of the right, after which it is no longer exercisable.
In this sense, Limitation was defined in the sentence of December 26th 1970 of the Supreme Court, still in force: “the limitation of an action is the phenomenon or institution by which, with the passage of time fixed by the law or by individuals for the exercise of a right, this right is extinguished, and the person concerned is prevented from performing the act or exercise of the action”
As previously mentioned, the limitation is not concretely regulated in our Civil Code, however, it is provided for certain rights; articles 19, 689, 703, 719, 730, 1299, 1301, 1508 or 1524 CC. About nationality through adoption, holographic will, testament granted at risk of death or military will…
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