Receivables Lawsuits: Questions and Answers

Depending on the legal ground of the receivable and the available documents, a request for payment, enforcement proceedings, mediation or a lawsuit can be considered.

First, the ground on which the receivable arose, its due date, the capacity of the debtor, the contract provisions and the payment records are determined. Enforcement without a judgment, proceedings specific to negotiable instruments, a direct receivables lawsuit and interim relief are subject to different conditions. In commercial and certain other disputes, mediation as a condition precedent to litigation must also be examined. Choosing a standard route without determining the limitation period, jurisdiction, subject-matter competence, formal notice and date of default may lead to a loss of rights.

The content of the contract and the debt to which the payment documents relate are examined together for the purposes of proof.

Signed contracts, invoices, delivery notes, delivery records, bank receipts, current account records and correspondence may show, from different angles, how the receivable arose and how it was performed. The description of the bank transfer, the debt against which the payment was offset and who issued the document are important. For merchants, the evidentiary character of commercial books is governed by special rules. In assessing evidence, denial of a signature, the rules on proof by written evidence and the need for an expert should be examined separately.

Limitation may affect whether the receivable can be asserted, while the absence of a procedural condition may prevent the court from reaching the merits of the case.

General or special limitation periods apply according to the nature of the receivable. Events such as commencement, suspension, interruption, partial payment and acknowledgment are examined separately; limitation and a preclusive period are not the same. Procedural conditions such as the requirement of mediation before litigation, the court’s subject-matter competence, capacity to be a party and legal interest are assessed separately. Merely showing that the receivable exists does not mean that all procedural conditions have been completed.

In some receivables a formal notice is not mandatory; the conditions of the due date and default must be examined according to the contract.

If a day for performing the debt has been agreed and the conditions of default have arisen, a formal notice may not be required; in other cases the formal notice becomes important. The starting point of interest, the date on which the debt fell due, and the delivery or payment document affect the outcome of the dispute.

Messages may have evidentiary value; however, the nature of the receivable, the documentary requirement and the reliability of the correspondence are examined together.

The limits on proof by instrument and the provisions on electronic data in the Code of Civil Procedure are important. Who sent the message, the completeness of the content, the basis of the receivable and supporting records such as bank transactions should be assessed.

A partial payment is taken into account according to the statutory rules of offsetting and the valid agreement of the parties.

The description of the payment, the date of payment, overdue interest and expense items, and the scope within which the parties acknowledged the debt are examined. Determining which invoice or installment the payment made corresponds to prevents double collection.