"A commercial dispute has a 3-year limitation period" — this answer is wrong in most cases. Under Article 319 of the Commercial Law 2005, the limitation period for commercial disputes is 2 years, not 3 years. The 3-year figure belongs to Article 429 of the Civil Code 2015 — applying to contract disputes outside the Commercial Law's scope.
Confusing these two numbers can cost an enterprise its right to sue without realizing it. This article distinguishes the two limitation regimes and how they run.
Table of contents
- 1. Two regimes: 2 years vs 3 years
- 2. When does limitation start running?
- 3. Does the court apply limitation automatically?
- 4. Expired limitation: will the court accept the case?
- 5. Exceptions: when is it not 2 years?
- 6. Limitation management checklist for enterprises
- Q&A
1. Two regimes: 2 years vs 3 years {#s1}
| Criterion | Commercial disputes (Commercial Law) | Civil contract disputes (Civil Code) |
|---|---|---|
| Basis | Article 319, Commercial Law 2005 | Article 429, Civil Code 2015 |
| Limitation | 2 years | 3 years |
| Runs from | the time lawful rights and interests are infringed | the date the claimant knew or should have known their lawful rights and interests were infringed |
| Example | sale of goods, service provision, logistics, agency contracts | civil loan contracts, non-commercial contracts |
The distinguishing rule: if the disputed relationship falls within the Commercial Law's scope (commercial activities, traders) → 2 years applies. If it is a purely civil relationship → 3 years applies.
Common mistake: mechanically applying "contracts = 3 years" to every contract. A sale-of-goods contract between two enterprises is a commercial dispute → 2 years.
2. When does limitation start running? {#s2}
- Commercial Law (Article 319): from the time lawful rights and interests are infringed — usually when the other party breaches (late delivery, non-payment, non-conforming goods…).
- Civil Code (Article 429): from the date the claimant knew or should have known their lawful rights and interests were infringed.
The "knew or should have known" point is often contested in litigation. Enterprises should preserve evidence of when the breach was discovered: acceptance records, complaint emails, debt demand letters… — these establish that limitation has not yet expired.
3. Does the court apply limitation automatically? {#s3}
No. Under Clause 2, Article 184 of the Civil Procedure Code 2015:
The court applies limitation provisions only upon the request of a party, provided the request is made before the first-instance court issues its judgment or decision.
Practical consequences:
- A defendant wishing to invoke limitation must actively request it — forgetting to request means losing the limitation defense;
- The request must be made before the first-instance judgment is pronounced — raising it at the appellate stage is too late.
4. Expired limitation: will the court accept the case? {#s4}
Yes. Two reasons:
- Under Clause 3, Article 155 of the Civil Code 2015, the court may not refuse to resolve a civil case for lack of an applicable provision;
- Under Clause 2, Article 184 of the Civil Procedure Code, limitation applies only upon request — if no party requests it, the case proceeds normally.
In other words: expired limitation does not mean the court refuses to accept the case. The risk only materializes when the opposing party requests limitation. Both plaintiffs and defendants must therefore calculate limitation early.
5. Exceptions: when is it not 2 years? {#s5}
Article 319 of the Commercial Law contains the phrase "except where the law provides otherwise" — some specialized laws set their own limitation periods for their fields (e.g., maritime, aviation, insurance…). Limitation may also be interrupted or restarted in cases prescribed by law (e.g., the breaching party acknowledges the obligation, the parties negotiate settlement…).
Enterprises in specialized fields should review their specialized law rather than mechanically applying the 2-year figure.
6. Limitation management checklist for enterprises {#s6}
- [ ] As soon as a dispute arises: determine the relationship's nature (commercial 2 years or civil 3 years);
- [ ] Record and preserve evidence of when the breach was discovered (the limitation start point);
- [ ] Calculate the filing deadline and enter it into a tracking system (allowing time for case preparation);
- [ ] If defendant: consider requesting limitation before the first-instance judgment is pronounced;
- [ ] Review specialized laws for any separate limitation periods;
- [ ] Any debt acknowledgment or repayment commitment can affect limitation — have a lawyer review before signing.
—
Q&A {#faq}
Q: Does a commercial dispute use a 2-year or 3-year limitation period?
A: It depends on the nature of the dispute. Commercial disputes under the Commercial Law 2005 use a 2-year period (Article 319), from the time lawful rights and interests are infringed, except where the law provides otherwise. Contract disputes outside the Commercial Law's scope use a 3-year period under Article 429 of the Civil Code 2015. Don't simplistically say every commercial dispute is 3 years.
Q: When does the limitation period start running?
A: Under Article 319 of the Commercial Law: from the time lawful rights and interests are infringed. Under Article 429 of the Civil Code: from the date the claimant knew or should have known their lawful rights and interests were infringed. The "knew or should have known" point is often contested — keep evidence of when the breach was discovered.
Q: Does the court apply limitation automatically?
A: No. Under Clause 2, Article 184 of the Civil Procedure Code 2015, the court applies limitation provisions only upon a party's request, made before the first-instance court issues its judgment or decision. A party wishing to invoke limitation must actively request it.
Q: If the limitation period has expired, will the court accept the case?
A: Yes. Under Clause 3, Article 155 of the Civil Code 2015, the court may not refuse to resolve a civil case for lack of an applicable provision; and under Clause 2, Article 184 of the Civil Procedure Code, limitation applies only upon request. If no party requests limitation, the case proceeds normally.
Q: Are there cases where the commercial limitation period is not 2 years?
A: Yes. Article 319 of the Commercial Law says "except where the law provides otherwise" — some specialized laws set their own periods. Limitation may also be interrupted or restarted in cases prescribed by law. Enterprises should review the specialized law governing their field.
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This article is general legal information and does not replace legal advice for any specific matter.
Need a lawyer for commercial disputes? Contact FLAT Law Firm — we help assess limitation, draft statements of claim, and represent clients in litigation. Hotline: 0988424851.
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