By Joubert Galpin Searle Associate - Loren Burton (Commercial Division)
Prescription can be a very complicated aspect of law in some instances, but the most important thing to know about prescription for any person or business is that you should not delay in instituting action for the recovery of a debt owing to you, or you may face not being able to recover the debt at all.
As a simple example: [A] enters into a contract with [B] on 15 June 2017. In terms of the contract [A] must pay [B] an amount of R300 000. [A] then fails to make payment in terms of the contact. [B] forgets that [A] owed money to him/her and on 6 July 2020 finds the file in his/her office and approaches his attorney to recover the money from [A]. [B]’s attorney advises [B] that unfortunately the claim has been outstanding for more than 3 years and [B] no longer has a legal claim to the money owed by [A]. In order for [B] to have avoided this situation, he/she would have had to approach his/her attorney and have instituted an action against [A] before 14 June 2020. This is due to the prescription of a debt occurring 3 years after it has been incurred.
This is a very simple illustration of prescription and there are a few events which may interrupt prescription and save your claim. If you have money owing to you and want to recover it, please do not hesitate to contact us to assist you with your claim. If you think your claim may have become prescribed, we can assist you to look at your matter and advise you if this is the case, or if not, we can proceed to recover the debt on your behalf.