Ch.10 Limitation periods, Art.10.9

Abstract

This commentary analyses Article 10.9 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the effects of expiration of the limitation period. Limitation periods may be regarded by a legal system as a matter of procedural or substantive law. In the second case, there are two options with regard to the effects of the expiry of the limitation period. Either the obligation is extinguished (strong effect) or the obligation continues to exist but the obligor is granted a right to refuse performance (weak effect). Under Art 10.9, the expiration of the limitation period does not extinguish the right. For the expiration of the limitation period to have effect, the obligor must assert it as a defence. A right may still be relied on as a defence even though the expiration of the limitation period for that right has been asserted. This commentary also considers the PICC's stand on the influence of the running of the limitation period on securities, collateral, and ancillary claims.