A loan becomes due (claimable) from the moment that it is lent to the borrower, unless the parties specifically agree otherwise.
In a September 2016 judgment the Supreme Court of Appeal held that a loan that was ‘due and payable to the lender within 30 days from the date of delivery of the lender’s written demand’ did not have the effect of delaying prescription to the date of demand for payment. The court held that the debt was immediately claimable and that prescription therefore began to run from when the loan was advanced to the borrower.
Creditors cannot rely on their own failure to demand payment from the debtor in order to delay the running of prescription. The creditor demanded payment more than three years after the loan had been advanced and the claim was prescribed.
The clause stating that the amount would be ‘due and payable’ within 30 days from demand was not a necessary condition for payment, but a procedural term of the contract.
Lenders wishing to delay the start of prescription to the date on which repayment must be made in terms of a demand for payment should include appropriate terms in their agreements such as:
- Payment will only be due (claimable) from the date on which payment is demanded – the payment date.
- Extinctive prescription will only begin to run from the payment date.
For existing agreements that do not contain such a term, the running of prescription can be interrupted by getting an express or tacit acknowledgement of liability by the debtor. Failing that, payment must be claimed by instituting proceedings within three years of the loan date.