OHADAC PRINCIPLES ON INTERNATIONAL COMMERCIAL CONTRACTS

Article 9.1

Rights and actions submitted to limitation periods

Unless otherwise agreed, the rights and actions derived from contracts are subject to limitation periods due to the expiry of a period of time according to the following Articles.

1. Scope of prescription

The differences between the civil law or continental legal systems and the systems of common law origin and in respect of the regulation of prescription start with their very name and the nature that is attributed to the institution; such differences are represented in the Caribbean region.

In the OHADAC environment, the systems of the continental or civil law or continental tradition, especially the tributaries of French law, collectively approach the treatment of “acquisitive or positive” prescription, and “extinctive, negative or discharging” prescription”.

The Anglo-American legal systems vary each one with distinct expressions of the impact that time has in the legal relationships. The expression “prescription” is reserved, in general, for the phenomenon of consolidation of ownership or other in rem rights through the passage of time (Prescription Act, Chapter 158, of Bahamas; Prescription Act, Chapter 192, of Belize; Limitation and Prescription Act, Chapter 252, of Barbados; Prescription Act, Chapter 7:02, of Dominica; Prescription Act of 1973 of Jamaica). To indicate the defensive or inhibitory effect of prescription, which permits a subject to adopt a negative attitude towards a claim, based on the mere passage of time, the terms limitation actions or limitation periods are commonly used. In these systems its regulation, from a more procedural perspective, remains on the fringes of substantive private law regulations [Limitation Act 2000, Chapter L60, of Anguilla; Limitation Act 1997 of Antigua and Barbuda; Limitation Act 1995, Chapter 83, of Bahamas; Limitation of Actions Act, Chapter 173, of Grenada; Limitation Act, Chapter 7:02, of Guyana; Article 2.047 Saint Lucian Civil Code, Revised laws of Saint Lucia, 2006, Chap 4.01; The limitation of Actions Act, particle IV (Debt and Contract) of Jamaica; Limitation Act, Chapter 2.12, of Montserrat; Limitation Act, Chapter 90, of Saint Vincent and Grenadines; Limitation of Certain Actions Act, Chapter 7:09, of Trinidad and Tobago; and Limitation of Actions Act, of Jamaica].

In these Principles the term “prescription” (without qualifiers) indicates the effect that the prolonged inactivity over time has in the exercise of the rights and actions derived for each party from the conclusion of the contract. Its regulation in the Principles, as a private regulation, aims to guarantee the promptness and security of legal transactions. The coexistence in the international sphere of a multitude of systems with different regulation alternatives and options that affect the thematic nuclei of the prescription (object, objective or subjective framework in the calculation of the time limits, interruption versus suspension, default of time periods, extinctive or merely defensive effect, scope of the private party autonomy, effectiveness in relation to the guarantees that protect rights...) constitutes a serious constraint on and obstacle to international commerce, making necessary a convergence between systems, fundamentally between the civil law or continental model and the Anglo-American model, through the proposal of uniform provisions which can essentially be shared by all the legal families that make up the OHADAC territory.

This convergence between the systems is affected by the debate about the procedural or substantive nature of prescription and the imperative or dispositive character of its regulatory standards. The clear tendency in international contracts is towards a substantive qualification, as a “contractual” matter, as deduced from Article 12 of Regulation (EC) 593/2008, of the European Parliament and of the Council, of 17 June 2008, on the Law Applicable to Contractual Obligations (Rome I).

2. The object of prescription in the national systems of the OHADAC

The rules on prescription raise an initial doubt regarding its object: if they are claims (créance, in French, rechtsvordering, in Dutch) or rights (droits in French, rechts, in Dutch). If the centre of gravity is located in the rights, prescription provokes its extinction; if the focus is on the authority to exercise them, prescription only permits the adoption of a negative attitude towards the untimely claim by the holder, i.e. the obligor continues to be obliged although the law suits have been undermined by the claim for the loan. In accordance with the first of the perspectives, prescription affects the same right by provoking its extinction, and in addition, the automatic mechanism or extinction ipso iure of the same right is defended. On the contrary, to maintain that what it prescribes is not the right but the claim which acts as a cover for enforcing it in law means that, once the prescription is verified, the subjective right will continue to exist, although deprived of any possibility find protection before the courts.

In common law the very expression limitation actions, which focuses on the procedural nature of the institution, emphasises the general position in the Anglo-American legal system, in which it is recognised that prescription is aimed not at the subjective right, but the claim, understood as the right to claim from whoever is responsible for the observance or satisfaction of the subjective right through determined active or passive conduct [English Limitation Act 1980 and paragraph 2.93 of the Report of the English Law Commission, presented to the Parliament in 2001 (The Law Commission - Law Com, num 270-, Limitation of Actions. Item 2 of the Seventh Programme of Law Reform-]. This focus involves the continued existence of the subjective right after the consummation of the prescription, although the beneficiary through this can refuse to perform the service or object in a different way to the exercise of the right (thus, also § 194.1 and § 214.1 German Civil Code [BGB]). However, in the United Kingdom, the Prescription and Limitation Act 1973 of Scotland differs from this conception.

The tributary territories of Dutch law have a regulation resulting from Article 3:306 Dutch Civil Code, which relates the prescription to the exercise of the rights through claims (Article 3:306 Suriname Civil Code).

The solution is different in some Spanish-speaking legal systems and in OHADAC territories that are tributaries or directly under the influence of French law. These express prescription as a method of extinction of claims or rights (Articles 1.625 and 2.512 Colombian Civil Code; Articles 633, 865, 866 and 868 Costa Rican Civil Code; Article 112 Cuban Civil Code; Article 2.219 French and Dominican Civil Code; Article 1.501 Guatemalan Civil Code; Article 2.263 Honduran Civil Code; Article 1.684 Honduran Commercial Code; Article 1.698 Panamanian Civil Code, Article 1.830 Puerto Rican Civil Code, Article 1.069 Saint Lucian Civil Code) or a mechanism for being discharged from the performance of obligations (Article 1.135 Mexican Civil Code, Articles 868 and 869 Nicaraguan Civil Code, Article 1.952 Venezuelan Civil Code and Article 2.047 Saint Lucian Civil Code).

3. Prescription in international texts of harmonisation of contract law

The suitability of establishing a regulation of prescription invariably appears in all international texts of unification of contract law as a mechanism for resolving the conflicts that arouse the divergences between the legal systems in international commercial transactions as regards the conceptual basis, time periods and effects of the prescription.

In these texts prescription is presented as a figure that does not automatically produce an extinctive effect, but which permits the beneficiary to utilise it as a means of defence against the claim or the procedural exercise of the claim on the part of the obligee. This is the case of United Nations Commission on International Trade Law (UNCITRAL) Conference on Prescription (Limitation) in the International Sale of Goods of 1974 (hereinafter Convention on Prescription), which establishes uniform rules on the period in which the parties in a contract of the sale of international goods of commodities can assert a claim resulting from the contract, in connection with its non-performance, revocation or validity. It must be taken into account, however, that the Convention, whose entry into force occurred on 1 August 1988, has a limited validity in the geographical sphere of OHADAC, given that it has been ratified by few states (Cuba, United States., Mexico and Dominican Republic), which introduces elements for incorporating a specific treatment of the matter into the OHADAC Principles.

Prescription is the object of specific attention in Chapter 10 of the UNIDROIT Principles, in Part III of the PECL and in Chapter 7 of Book III of the DCFR which, with slight variations, includes the provisions of the PECL. All of these texts openly opt for what one might call the defensive conception of prescription. It is the criterion of the UNIDROIT Principles which configure prescription as a limit to the exercise of rights (Article 10.1) and expressly affirm that the expiry of the limitation period does not extinguish the right (Article 10.9); the PECL (Articles 14:101 and 14:501) and the DCFR (Article III-7:101). Terminologically, the PECL alludes to “claims subject to limitation”, while the DCFR uses as a general heading “rights subject to limitation”.

This same conception is derived from the Proposal for Regulation of the European Parliament and of the Council on a Common European Sales Law (2011) by providing, as an effect of prescription, that “the debtor is entitled to refuse performance of the obligation in question and the creditor loses all remedies for non-performance except withholding performance” (Article 185 CESL).

4. The scope of prescription proposed in the OHADAC Principles

Once the different conceptual perspectives of prescription are analysed, without doubt, the most striking aspect of the debate is not what it is about, but the consequences that are derived from it. And it is certain that, sometimes, the effects that are derived from each one of the conceptions maintained (waiver of prescription gained, admissibility or not of the repetition of the spontaneously satisfied prescribed debt, enforceability of the loan prescribed through set-off, ex oficio assessment or not of the prescription...) do not always maintain the required consistency.

On the one hand, if prescription is conceived as a phenomenon which provokes the extinction of rights, it is difficult to justify certain provisions such as the necessity of its assertion, the possibility of waiving the consummated prescription and subsequent re-establishment or reappearance of the prescribed right or the non-repeatability of the sum paid after the consummation of the prescription.

On the other hand, if prescription is configured as a merely defensive instrument, which can only be assessed at the instance of a party, it cannot very easily prohibit the alteration through an agreement on the limitation periods or apply the principle of being an accessory, so that if the prescription of the principal claim is claimed, its effect is spread to the claims due to accessory services.

The proposed provision, faithful to the minimum requirements of these Principles, responds to what can be considered the basis or common nucleus of the institution in the countries that make up OHADAC: prescription is directed at the specific powers resulting from the conclusion of the contract, which each of the parties can exercise in relation to one another. The rule relates prescription to the exercise of the rights and claims derived by the parties from the conclusion of the contract, including, not only the principal rights which, in accordance with these Principles, are incumbent on the parties to the contract (claim for performance, exercise of any of the remedies resulting from non-performance, assertion of the invalidity of the contract), but also in relation to those that arise from the contractual agreement for each one of them, such as, e.g. the compliance with a penalty clause.

Example: In a contract for the provision of consultancy services between consultant A and company B, dedicated to the manufacture of IT products, a confidentiality clause is included through which A undertakes not to disclose any information on the production process of the company B, stipulating for the case of non-performance, in addition to the corresponding compensation for damages, the payment of one million euros. Both the action for damages as well as the action for the claim for the penalty will be subjected to the limitation period.


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