A common assumption is:
“He genuinely owes me the money, so I can take legal action whenever I want.”
That can be a dangerous assumption.
Sri Lankan law places time limits on different kinds of claims. If you wait too long, a claim that may otherwise have been valid can become affected by prescription.
There is no single time limit for every debt
The applicable period depends on the nature of the transaction and the legal basis of the claim.
For example, under the Prescription Ordinance:
- claims based on certain written promises, contracts or agreements may generally have a six-year period;
- money lent without written security and certain unwritten agreements may generally fall within a three-year period; and
- claims for matters such as goods sold and delivered, shop bills, book debts, or work and labour done may in some circumstances have a one-year period.
These are examples. They should not be treated as a universal timetable for every money claim.
When does the time start running?
That is another important question.
It is not always simply:
“the day I gave him the money.”
The relevant date may depend on when payment became due, whether a repayment date had been agreed, whether payment was to be made on demand, and when the cause of action actually arose.
Sri Lankan courts have recognised, for example, that where an informal loan had no agreed repayment date, the circumstances surrounding a demand for repayment could become important in determining when the cause of action arose.
“But he keeps admitting that he owes me.”
Do not assume that repeated promises automatically keep a claim alive forever.
A written acknowledgment, a new promise, or a part payment may have legal significance, but the effect depends on what actually happened and how it was recorded.
A telephone call saying:
“I’ll definitely pay you next month.”
should therefore not be treated as a safe reason to keep postponing action.
Do not wait until the last possible day
Even if you believe that you are still within the applicable period, waiting until the final months creates unnecessary risk.
Documents may disappear.
Messages may be deleted.
Witnesses may become difficult to locate.
And there may be disagreement about exactly when the debt became due.
So, how long can you wait?
There is no single answer that applies to every debt.
The safer question is:
“What type of claim do I have, when did my right to take action arise, and what prescription period applies to that particular claim?”
Practical point: If a substantial period has already passed, check the legal position before agreeing to another delay simply because the debtor promises to pay later.
Legal framework: the Prescription Ordinance contains different limitation periods for different kinds of claims. The starting date and effect of any acknowledgment, promise or part payment depend on the facts and applicable law.
General information only. Prescription periods and the date from which they are calculated depend on the nature of the claim and the particular facts of the transaction. Reading this guide does not by itself create an Attorney-at-Law/client relationship.