08 The Limitation Act 1963
1. Introduction
The Limitation Act, 1963 is an Act
of the Parliament of India that prescribes time limits for the commencement of
legal proceedings. The Act was enacted to prevent the abuse of the legal
process by allowing people to bring stale claims.
The Limitation Act applies to all
civil suits and proceedings, including suits for the recovery of money,
property, or other relief. The Act also applies to arbitration proceedings.
The Limitation Act sets out
different time limits for different types of claims. The time limits are set
out in a schedule to the Act. The time limits start to run from the date on
which the cause of action arises.
There are a number of exceptions to
the time limits set out in the Limitation Act. For example, the time limit may
be extended if the defendant is out of India or if the plaintiff is under a
legal disability.
The Limitation Act is an important
piece of legislation that helps to protect the rights of both plaintiffs and
defendants. It prevents plaintiffs from bringing stale claims and it ensures
that defendants have a reasonable amount of time to defend themselves.
Some of the key concepts that are covered in the
Limitation Act:
- Cause of action: The event that gives rise to
a legal claim.
- Limitation period: The time limit within which
a legal claim must be brought.
- Extension of time: The circumstances in which the
limitation period may be extended.
- Acknowledgment: A written statement by the
defendant that acknowledges the claim of the plaintiff.
- Payment: A payment made by the defendant to
the plaintiff in respect of the claim.
- Adverse possession: The acquisition of
ownership of property by occupying it for a certain period of time.
2. Objects, Purposes and Definitions under the Act
The Limitation Act, 1963 has two main objects:
·
To prevent the abuse of the legal process by
allowing people to bring stale claims.
·
To ensure that defendants have a reasonable
amount of time to defend themselves.
The Act achieves these objects by
setting out time limits for the commencement of legal proceedings. The time
limits are set out in a schedule to the Act. The time limits start to run from
the date on which the cause of action arises.
There are a number of exceptions
to the time limits set out in the Limitation Act. For example, the time limit
may be extended if the defendant is out of India or if the plaintiff is under a
legal disability.
The following are some of the key purposes of the Limitation
Act:
·
To protect the interests of defendants by
ensuring that they have a reasonable amount of time to defend themselves.
·
To prevent the abuse of the legal process by
allowing people to bring stale claims.
·
To promote certainty and finality in the law.
·
To discourage frivolous and vexatious
litigation.
·
To ensure that the law is administered fairly
and efficiently.
2.1 Protect the interests of Defendants.
The Limitation Act protects the
interests of defendants by ensuring that they have a reasonable amount of time
to defend themselves. This is important because it allows defendants to gather
evidence, prepare their case, and consult with an attorney.
Without a limitation period,
defendants could be sued for claims that are many years old. This would be
unfair to defendants, as they would have difficulty remembering the events that
gave rise to the claim and they may not have access to the same evidence that
was available at the time the claim arose.
The limitation period also helps to
prevent the abuse of the legal process. If there were no limitation period,
plaintiffs could bring claims for stale or frivolous claims. This would clog up
the courts and make it difficult for people to get justice.
The limitation period is a
fundamental principle of the law. It ensures that defendants have a fair
opportunity to defend themselves and that the legal system is not abused.
2.2 Prevent the Abuse of The Legal Process
The Limitation Act prevents the
abuse of the legal process by allowing people to bring stale claims. A stale
claim is a claim that is brought after a long period of time has passed since
the cause of action arose.
There are a number of reasons why
stale claims can be an abuse of the legal process. First, it can be unfair to
the defendant. If a defendant is sued for a stale claim, they may have
difficulty remembering the events that gave rise to the claim and they may not
have access to the same evidence that was available at the time the claim
arose.
Second, stale claims can clog up
the courts. If there were no limitation period, plaintiffs could bring claims
for stale or frivolous claims. This would make it difficult for people to get
justice, as the courts would be bogged down with old and irrelevant cases.
Third, stale claims can discourage
people from settling disputes. If plaintiffs know that they can bring a stale
claim, they may be less likely to settle a dispute out of court. This can lead
to more litigation and higher costs for everyone involved.
The Limitation Act helps to prevent
the abuse of the legal process by setting time limits for the commencement of
legal proceedings. This ensures that claims are brought within a reasonable
period of time and that defendants have a fair opportunity to defend
themselves.
2.3 Promote Certainty and Finality in the Law.
The Limitation Act promotes
certainty and finality in the law by setting time limits for the commencement
of legal proceedings. This ensures that disputes are resolved within a
reasonable period of time and that parties can know with certainty whether or
not they have a claim.
Certainty and finality are
important principles of the law. They help to protect people's rights and to
promote the efficient administration of justice.
Without a limitation period, people
could be sued for claims that are many years old. This would create uncertainty
and confusion, as it would be difficult to know whether or not a claim was
still valid. It could also lead to endless litigation, as parties would be
constantly trying to relitigate old disputes.
The limitation period helps to
promote certainty and finality by providing a clear deadline for bringing
claims. This ensures that disputes are resolved within a reasonable period of
time and that parties can move on with their lives.
2.4 Discourage Frivolous and Vexatious Litigation.
Frivolous and vexatious litigation
is litigation that is brought without merit or for the purpose of harassment.
It can clog up the courts and waste valuable judicial resources.
The Limitation Act discourages
frivolous and vexatious litigation by setting time limits for the commencement
of legal proceedings. This ensures that claims are brought within a reasonable
period of time and that defendants have a fair opportunity to defend
themselves.
The Limitation Act also provides
for a number of exceptions to the time limits, but these exceptions are
narrowly construed. This means that they can only be used in limited
circumstances.
For example, the limitation period
may be extended if the plaintiff was under a legal disability at the time the
cause of action arose. However, this exception will only be applied if the
plaintiff can show that they were genuinely unable to bring the claim within
the limitation period.
The Limitation Act also allows the
court to dismiss stale claims, even if the plaintiff has filed their claim
within the limitation period. This can be done if the court finds that the
claim is frivolous or vexatious.
2.5 Ensures the law is Administered Fairly and Efficiently.
The Limitation Act ensures that the
law is administered fairly and efficiently by setting time limits for the
commencement of legal proceedings. This ensures that disputes are resolved
within a reasonable period of time and that parties have a fair opportunity to
present their cases.
Fairness and efficiency are
important principles of the law. They help to ensure that everyone is treated
equally under the law and that the legal system is not bogged down with
unnecessary delays.
Without a limitation period, people
could be sued for claims that are many years old. This would create unfairness,
as it would be difficult for defendants to remember the events that gave rise
to the claim and they may not have access to the same evidence that was
available at the time the claim arose.
It would also be inefficient, as it
would take longer to resolve disputes and the courts would be bogged down with
old and irrelevant cases.
The limitation period helps to
ensure fairness and efficiency by providing a clear deadline for bringing
claims. This ensures that disputes are resolved within a reasonable period of
time and that parties have a fair opportunity to present their cases.
3. Bar of Limitation, Prescribed Period and the
Schedule, Continuous Running of Time, Special Period of Limitation for the Government,
Application to Arbitration Proceedings
The Limitation Act, 1963
sets out the time limits within which legal proceedings must be commenced.
These time limits are called the limitation periods.
The limitation period is
a bar to the commencement of legal proceedings. This means that if a claim is
brought after the limitation period has expired, the court will dismiss the
claim.
There are a number of exceptions to
the limitation period. These exceptions are narrowly construed, which means
that they can only be used in limited circumstances.
The following are some of the key
points to keep in mind about the bar of limitation:
·
The limitation period starts to run from the
date on which the cause of action arises.
·
The limitation period is set out in the Schedule
to the Limitation Act.
·
There are a number of exceptions to the
limitation period.
·
The limitation period can be extended in certain
circumstances.
·
The limitation period can be waived by the
defendant.
Special period of limitation for
the government
The government has a special period
of limitation for bringing legal proceedings. This period is usually longer
than the normal limitation period.
The special period of limitation
for the government is set out in Section 12 of the Limitation Act.
Application to arbitration
proceedings
The limitation period applies to
arbitration proceedings. This means that a party cannot bring an arbitration
claim after the limitation period has expired.
However, there are a number of
exceptions to this rule. For example, the limitation period may be extended if
the arbitration proceedings are stayed or if the party is under a legal
disability.
3.1 Bar of Limitation
The
bar of limitation is a legal principle that prevents a court from hearing a case
if it is brought after the time limit has expired. The time limit is called the
limitation period.
The limitation period is set out in
the Limitation Act, 1963. The limitation period for different types of claims
varies. For example, the limitation period for a claim for breach of contract
is three years, while the limitation period for a claim for personal injury is
three years.
The limitation period starts to run
from the date on which the cause of action arises. The cause of action is the
event that gives rise to the claim. For example, the cause of action for a
claim for breach of contract is the date on which the contract is breached.
There are a number of exceptions to
the limitation period. These exceptions are narrowly construed, which means that
they can only be used in limited circumstances.
Some of the most common exceptions to the limitation period
include:
·
The defendant's fraud or concealment.
·
The plaintiff's disability.
·
The fact that the defendant has taken advantage
of the plaintiff's delay.
·
The fact that the claim is based on a foreign
law.
If a claim is brought after the
limitation period has expired, the court will dismiss the claim. However, there
are a number of things that a plaintiff can do to try to avoid the bar of
limitation.
One thing that a plaintiff can do
is to apply to the court for an extension of time. The court may grant an
extension of time if there are good reasons for doing so, such as the
plaintiff's disability or the fact that the defendant has taken advantage of the
plaintiff's delay.
Another thing that a plaintiff can
do is to try to revive the claim. This can be done if the plaintiff can show
that the defendant has acknowledged the claim or that the defendant has taken
steps to enforce the claim.
If you are considering bringing a
legal claim, it is important to be aware of the limitation period that applies
to your case. If you bring a claim after the limitation period has expired,
your case may be dismissed.
3.2 Prescribed Period and the Schedule
The prescribed period is the time
limit within which legal proceedings must be commenced. The prescribed period
is set out in the Schedule to the Limitation Act, 1963.
The Schedule to the Limitation Act
lists the prescribed period for different types of claims. For example, the
prescribed period for a claim for breach of contract is three years, while the
prescribed period for a claim for personal injury is three years.
The prescribed period starts to run
from the date on which the cause of action arises. The cause of action is the
event that gives rise to the claim. For example, the cause of action for a
claim for breach of contract is the date on which the contract is breached.
There are a number of exceptions to
the prescribed period. These exceptions are narrowly construed, which means
that they can only be used in limited circumstances.
Some of the most common exceptions to the prescribed period
include:
·
The defendant's fraud or concealment.
·
The plaintiff's disability.
·
The fact that the defendant has taken advantage
of the plaintiff's delay.
·
The fact that the claim is based on a foreign
law.
If a claim is brought after the
prescribed period has expired, the court will dismiss the claim. However, there
are a number of things that a plaintiff can do to try to avoid the bar of
limitation.
One thing that a plaintiff can do
is to apply to the court for an extension of time. The court may grant an
extension of time if there are good reasons for doing so, such as the
plaintiff's disability or the fact that the defendant has taken advantage of
the plaintiff's delay.
Another thing that a plaintiff can
do is to try to revive the claim. This can be done if the plaintiff can show
that the defendant has acknowledged the claim or that the defendant has taken
steps to enforce the claim.
If you are considering bringing a
legal claim, it is important to be aware of the prescribed period that applies
to your case. If you bring a claim after the prescribed period has expired,
your case may be dismissed.
3.3 Continuous Running of Time
The continuous running of time
principle states that the limitation period starts to run and continues to run
even if there are interruptions or delays.
This means that if a plaintiff does
not take any action to bring a claim within the prescribed period, the
limitation period will continue to run even if the plaintiff is unaware of their
claim or is unable to bring the claim for some reason.
There are a few exceptions to the
continuous running of time principle. For example, the limitation period may be
suspended if the defendant is outside of India or if the plaintiff is under a
legal disability.
3.4 Special Period of Limitation for the Government
The government has a special period
of limitation for bringing legal proceedings. This period is usually longer
than the normal limitation period.
The special period of limitation
for the government is set out in Section 12 of the Limitation Act. The
following are some of the special limitation periods for the government:
·
3 years for suits for the recovery of money due
to the government.
·
6 years for suits for the recovery of land or
other immovable property belonging to the government.
·
3 years for suits for the recovery of damages
for breach of contract by the government.
The special period of limitation
for the government is based on the principle that the government should be
given more time to bring legal proceedings because it has more resources and is
better able to investigate and prepare its case.
However, the special period of
limitation for the government is not absolute. There are a few exceptions to
the special period of limitation. For example, the limitation period may be
shorter if the government is aware of its claim or if the government has been
negligent.
If you are considering bringing a
legal claim against the government, it is important to be aware of the special
period of limitation that applies to your case. If you bring a claim after the
special period of limitation has expired, your case may be dismissed.
3.5 Application to Arbitration Proceedings
The Limitation Act applies to
arbitration proceedings. This means that a party cannot bring an arbitration
claim after the limitation period has expired.
However, there are a number of exceptions
to this rule. For example, the limitation period may be extended if the
arbitration proceedings are stayed or if the party is under a legal disability.
The specific provisions on the
application of the Limitation Act to arbitration proceedings are set out in
Section 43 of the Limitation Act. Section 43 provides that:
The Limitation Act
shall apply to arbitrations as it applies to proceedings in court.
This means that the limitation
period for an arbitration claim is the same as the limitation period for a
claim that would be brought in court.
The limitation period starts to run
from the date on which the cause of action arises. The cause of action is the
event that gives rise to the claim. For example, the cause of action for a
claim for breach of contract is the date on which the contract is breached.
There are a few exceptions to the
general rule that the Limitation Act applies to arbitration proceedings. For
example, Section 43(2) of the Limitation Act provides that the limitation
period for an arbitration claim is not affected by the fact that the
arbitration proceedings are stayed.
Section 43(3) of the Limitation Act
also provides that the limitation period for an arbitration claim is not
affected by the fact that the party is under a legal disability.
If you are considering bringing an
arbitration claim, it is important to be aware of the limitation period that
applies to your case. If you bring a claim after the limitation period has
expired, your case may be dismissed.
4. Extension of Period: Court closed, for Sufficient
cause, Legal Disability, No Bar in Suits against Trustees
The Limitation Act,
1963 provides for a number of circumstances in which the limitation period can
be extended. These circumstances include:
·
Where the court is closed.
·
Where there is sufficient cause.
·
Where the plaintiff is under a legal disability.
·
Where the suit is against a trustee.
Court closed: The limitation period can be extended if the court is
closed for a period of time. This includes situations where the court is closed
due to natural disaster, public emergency, or other reasons.
Sufficient cause: The limitation period
can be extended if there is sufficient cause. This means that there is a good
reason why the plaintiff was unable to bring the claim within the limitation
period. Some examples of sufficient cause include:
o The
plaintiff was unaware of the claim.
o The
plaintiff was unable to find the defendant.
o The
plaintiff was unable to afford to bring the claim.
Legal disability: The limitation period
can be extended if the plaintiff is under a legal disability. This means that
the plaintiff is unable to bring the claim due to their age, mental capacity,
or other reason.
No bar in suits against trustees:
There is no bar to the limitation period in suits against trustees. This means
that the limitation period does not apply to claims against trustees, even if
the claim is brought after the limitation period has expired.
4.1 Court Closed
The limitation period can be
extended if the court is closed for a period of time. This is because the
limitation period is intended to ensure that legal proceedings are brought
within a reasonable period of time. However, if the court is closed, it is not
possible to bring legal proceedings within a reasonable period of time.
The court is considered to be
closed if it is physically closed or if it is unable to function due to a
natural disaster, public emergency, or other reason.
The limitation period will be
extended for the period of time that the court is closed. For example, if the
court is closed for two months, the limitation period will be extended by two
months.
The extension of the limitation
period is not automatic. The plaintiff must apply to the court for an order
extending the limitation period. The court will consider the circumstances of
the case and decide whether to grant the order.
Some examples of situations where
the court may be closed and the limitation period may be extended include:
·
A natural disaster, such as a flood or
earthquake, that damages the court building or makes it impossible to hold
court.
·
A public emergency, such as a war or riot, that
makes it impossible to hold court.
·
A strike by court employees that prevents the
court from functioning.
4.2 for Sufficient cause
The concept of "sufficient
cause" is a broad one, and it is up to the court to decide whether there
is sufficient cause to extend the limitation period in a particular case.
However, the following are some examples of situations that may be considered
sufficient cause:
·
The plaintiff was unaware of the claim.
This may be the case if the plaintiff was not aware of their legal rights or if
the defendant concealed the claim from the plaintiff.
·
The plaintiff was unable to find the
defendant. This may be the case if the defendant has moved away or if the
defendant is concealing their identity.
·
The plaintiff was unable to afford to bring
the claim. This may be the case if the plaintiff does not have the money to
pay for legal fees or if the plaintiff is on a low income.
It is important to note that the
mere fact that the plaintiff was unable to bring the claim within the
limitation period does not automatically mean that there is sufficient cause to
extend the limitation period. The court will consider all of the circumstances
of the case, including the reasons why the plaintiff was unable to bring the
claim, before deciding whether to grant an extension.
4.3 Legal Disability
A legal disability is a condition
that prevents a person from exercising their legal rights. Some common examples
of legal disabilities include:
·
Minority: A minor is a person who is
under the age of 18.
·
Incompetency: A person who is incompetent
is unable to manage their own affairs due to mental illness or other reason.
·
Imprisonment: A person who is imprisoned
is unable to bring a claim while they are in prison.
The limitation period can be extended
if the plaintiff is under a legal disability at the time the cause of action
arises. The limitation period will be extended until the disability is removed.
For example, if a minor is injured
in a car accident, the limitation period for bringing a claim will be extended
until the minor reaches the age of 18.
If the plaintiff is under a legal
disability at the time the limitation period expires, the limitation period
will be extended until the disability is removed. However, the limitation
period will not be extended indefinitely. The court will consider all of the
circumstances of the case, including the nature of the disability and the
plaintiff's efforts to bring the claim, before deciding whether to grant an
extension.
4.4 No Bar in Suits against Trustees
Section 10 of the Limitation Act,
1963 provides that there is no bar to the limitation period in suits against
trustees. This means that the limitation period does not apply to claims
against trustees, even if the claim is brought after the limitation period has
expired.
The reason for this is that
trustees are fiduciaries, which means that they have a duty to act in the best
interests of the beneficiaries of the trust. This duty is so important that the
law does not allow trustees to rely on the limitation period to avoid their
liability.
The fact that there is no bar to
the limitation period in suits against trustees does not mean that trustees are
always liable for claims brought against them after the limitation period has
expired. The trustees may still be able to defend the claim on other grounds,
such as the fact that the claim is not valid or that the claimant has not
suffered any loss.
However, the fact that there is no
bar to the limitation period in suits against trustees does mean that trustees
should be careful not to allow claims to lapse. If a trustee is aware of a
claim against them, they should take steps to investigate the claim and to
defend themselves against it, even if the claim is brought after the limitation
period has expired.
5. Computation of Period of Limitation, Exclusion
of Time, Effect of Death, Defendant Being out of India, Fraud and Mistake
The Limitation Act, 1963 sets out
the rules for calculating the limitation period. The limitation period is the
time period within which a legal claim must be brought. If a claim is not
brought within the limitation period, it may be dismissed by the court.
The Limitation Act also provides
for certain circumstances in which the limitation period may be excluded or
suspended. These circumstances include:
·
The death of the plaintiff or defendant.
·
The defendant being out of India.
·
Fraud or mistake.
Further let us look at below points
·
Computation of Period of Limitation: The
limitation period is calculated from the date on which the cause of action
arises. The cause of action is the event that gives rise to the claim. For
example, the cause of action for a breach of contract is the date on which the
contract is breached.
·
Exclusion of Time: The limitation period
may be excluded in certain circumstances. For example, the limitation period is
excluded if the plaintiff is under a legal disability.
·
Effect of Death: The limitation period is
suspended if the plaintiff or defendant dies. The limitation period will start
to run again from the date of the death of the deceased person.
·
Defendant Being out of India: The
limitation period is suspended if the defendant is out of India. The limitation
period will start to run again from the date on which the defendant returns to
India.
·
Fraud and Mistake: The limitation period
is excluded if the claim is based on fraud or mistake. Fraud is a deliberate
deception that is intended to cause harm. Mistake is an error in judgment that
is not made intentionally.
5.1 Computation of Period of
Limitation:
The limitation period is calculated
from the date on which the cause of action arises. The cause of action is the
event that gives rise to the claim. For example, the cause of action for a breach
of contract is the date on which the contract is breached.
The date on which the cause of
action arises is not always clear-cut. There may be different events that could
give rise to a claim, and it may be necessary to consider all of the relevant events
to determine the date on which the cause of action arises.
For example, if a person is injured
in a car accident, the cause of action for the injury may arise on the date of
the accident, or it may arise on the date on which the person discovers the injury.
The court will consider all of the
relevant facts and circumstances to determine the date on which the cause of
action arises.
5.2 Exclusion of Time:
The limitation period may be
excluded in certain circumstances. This means that the limitation period does
not start to run, or it may be extended.
One of the circumstances in which
the limitation period may be excluded is if the plaintiff is under a legal
disability. A legal disability is a condition that prevents a person from
exercising their legal rights. Some common examples of legal disabilities
include:
·
Minority: A minor is a person who is
under the age of 18.
·
Incompetency: A person who is incompetent
is unable to manage their own affairs due to mental illness or other reason.
·
Imprisonment: A person who is imprisoned
is unable to bring a claim while they are in prison.
If the plaintiff is under a legal
disability at the time the cause of action arises, the limitation period will
be excluded. This means that the limitation period will not start to run until
the disability is removed.
For example, if a minor is injured
in a car accident, the limitation period for bringing a claim will be excluded
until the minor reaches the age of 18.
5.3 Effect of Death:
The limitation period is suspended
if the plaintiff or defendant dies. This means that the limitation period does
not start to run until the death of the deceased person.
The limitation period will start to
run again from the date of the death of the deceased person. This means that
the plaintiff or defendant's heirs or legal representatives will have the same
amount of time to bring a claim as the original plaintiff or defendant would
have had.
For example, if a person is injured
in a car accident and the plaintiff dies before the limitation period expires,
the plaintiff's heirs will have the same amount of time to bring a claim as the
plaintiff would have had.
5.4 Defendant Being out of
India:
The limitation period is suspended
if the defendant is out of India. This means that the limitation period does
not start to run until the defendant returns to India.
The limitation period will start to
run again from the date on which the defendant returns to India. This means
that the plaintiff will have the same amount of time to bring a claim as they
would have had if the defendant had not been out of India.
For example, if a person is injured
in a car accident in India and the defendant is a foreigner who is out of India
at the time of the accident, the limitation period will be suspended until the
defendant returns to India.
5.5 Fraud and Mistake:
The limitation period is excluded
if the claim is based on fraud or mistake. This means that the limitation
period does not start to run until the fraud or mistake is discovered.
Fraud is a deliberate deception
that is intended to cause harm. It can take many forms, such as
misrepresentation, concealment, or duress.
Mistake is an error in judgment
that is not made intentionally. It can be caused by a variety of factors, such
as ignorance, misunderstanding, or miscalculation.
If a claim is based on fraud or
mistake, the limitation period will not start to run until the fraud or mistake
is discovered. This means that the plaintiff will have an unlimited amount of
time to bring a claim, even if the limitation period has expired for other
types of claims.
For example, if a person is tricked into signing a contract that they would not have otherwise signed, the limitation period for bringing a claim for breach of contract will not start to run until the fraud is discovered.
6. Effect of Acknowledgment in Writing and Payment
on Account of Debt
The Limitation Act, 1963 provides
for certain events that have the effect of restarting the limitation period.
These events include an acknowledgment in writing and payment on account of
debt.
Topic Points
·
Acknowledgment in Writing: An
acknowledgment in writing is a document signed by the person who owes the debt,
or by their agent, that acknowledges the existence of the debt. The
acknowledgment must be in writing and it must be signed by the person who owes
the debt.
·
Payment on Account of Debt: Payment on
account of debt is any payment made by the person who owes the debt, even if it
is less than the full amount of the debt. The payment does not have to be made
in full to restart the limitation period.
6.1 Acknowledgment in Writing
An acknowledgment in writing is a
document that is signed by the person who owes the debt, or by their agent,
that acknowledges the existence of the debt. The acknowledgment must be in
writing and it must be signed by the person who owes the debt.
The acknowledgment does not have to
be in any particular form. It can be a letter, a receipt, or any other document
that acknowledges the debt. However, the acknowledgment must be clear and
unambiguous. It must be clear that the person who signed the acknowledgment is
acknowledging the existence of the debt.
The acknowledgment must be signed
by the person who owes the debt. It cannot be signed by someone else, such as a
guarantor.
The acknowledgment will restart the
limitation period from the date on which it is signed. This means that the
plaintiff will have a new limitation period to bring a claim for the debt.
For example, if the limitation
period for a debt is three years and the debtor acknowledges the debt in
writing one year after the debt is incurred, the limitation period will restart
from the date on which the acknowledgment is signed. This means that the
plaintiff will have two more years to bring a claim for the debt.
The acknowledgment of a debt in
writing is a powerful tool that can be used to restart the limitation period.
If you are owed a debt, it is important to consider having the debtor
acknowledge the debt in writing.
6.2 Payment on Account of Debt
Payment on account of debt is a
payment made by the person who owes the debt, even if it is less than the full
amount of the debt. The payment does not have to be made in full to restart the
limitation period.
The payment can be made in cash, by
check, or by other means. It does not matter how the payment is made.
The payment must be made by the
person who owes the debt. It cannot be made by someone else, such as a
guarantor.
The payment will restart the
limitation period from the date on which it is made. This means that the
plaintiff will have a new limitation period to bring a claim for the debt.
For example, if the limitation
period for a debt is three years and the debtor makes a payment on account of
the debt one year after the debt is incurred, the limitation period will
restart from the date on which the payment is made. This means that the
plaintiff will have two more years to bring a claim for the debt.
The payment on account of debt is a
powerful tool that can be used to restart the limitation period. If you are
owed a debt, it is important to consider having the debtor make a payment on
account of the debt.
7. Adverse possession - acquisition of ownership by
possession
Adverse possession is a legal
doctrine that allows a person to acquire ownership of property by occupying it
for a certain period of time. The period of time required for adverse
possession to occur varies from state to state, but it is typically 10 to 20
years.
Elements of Adverse Possession: There are five elements that must be present for adverse
possession to occur:
·
Possession: The person must be in actual
possession of the property. This means that they must be using the property and
have control over it.
·
Hostile Possession: The possession must
be hostile to the true owner. This means that the person must not have the
permission of the true owner to be in possession of the property.
·
Open and Notorious Possession: The
possession must be open and notorious. This means that it must be visible to
the public and the true owner.
·
Continuous Possession: The possession
must be continuous. This means that the person must be in possession of the
property for the entire period of time required for adverse possession to
occur.
·
Exclusive Possession: The possession must
be exclusive. This means that the person must be the only one in possession of
the property.
Benefits of Adverse Possession: If a person successfully establishes adverse possession,
they will acquire ownership of the property. This means that they will have the
same rights as the true owner, including the right to sell the property or
mortgage it.
Risks of Adverse Possession: There are also some risks associated with adverse
possession. For example, if the true owner discovers that adverse possession is
occurring, they may file a lawsuit to reclaim the property. If the true owner
is successful, the person who was in adverse possession may be required to pay
damages.
7.1 Elements of Adverse Possession:
7.1.1 Possession
The possession must be actual,
which means that the person must be using the property and have control over
it. The use of the property must be significant and continuous. It is not
enough to simply walk on the property or occasionally use it for recreation.
The person must use the property in a way that makes it clear that they are
claiming ownership.
The control that the person
exercises over the property must also be significant. They must be able to
exclude others from the property and prevent them from using it.
Some examples of actual possession include:
·
Living on the property.
·
Cultivating the property.
·
Enclosing the property.
·
Paying taxes on the property.
·
Registering the property with the government.
If the person is simply using the
property for a short period of time, such as a vacation, they will not be
considered to be in actual possession. The possession must be continuous and
uninterrupted.
The person must also have control
over the property. This means that they must be able to exclude others from the
property and prevent them from using it. If the person allows others to use the
property, they will not be considered to be in actual possession.
The determination of whether or
not a person is in actual possession of property is a factual matter that will
be decided by the court. There is no bright-line rule and the factors that will
be considered will vary from case to case.
7.1.2 Hostile Possession
The possession must be hostile,
which means that the person must not have the permission of the true owner to
be in possession of the property. If the person has the permission of the true
owner, they cannot acquire ownership of the property through adverse possession.
However, there are some exceptions
to this rule. For example, if the person was originally given permission to be
in possession of the property, but the true owner later revokes their
permission, the person may still be able to acquire ownership through adverse
possession.
The determination of whether or not
a person's possession is hostile is a factual matter that will be decided by
the court. There is no bright-line rule and the factors that will be considered
will vary from case to case.
Some factors that the court may consider include:
·
The person's intent. Did the person intend to
claim ownership of the property?
·
The true owner's knowledge of the person's
possession. Did the true owner know that the person was in possession of the
property?
·
The true owner's acquiescence. Did the true
owner do anything to indicate that they were accepting the person's possession
of the property?
·
The length of time the person has been in
possession of the property.
·
The nature of the person's possession. Is the
person using the property in a way that makes it clear that they are claiming
ownership?
7.1.3 Open and Notorious Possession
The
possession must be open and notorious, which means that it must be visible to
the public and the true owner. This means that the person must not try to hide
their possession of the property. They must make it clear to the world that
they are claiming ownership.
The
possession must be visible to the public in a way that would put the true owner
on notice of the adverse possession. This could include things like:
·
Building a fence around the property.
·
Putting up a sign that says "No
Trespassing."
·
Paying taxes on the property.
·
Registering the property with the government.
The
possession must also be notorious, which means that it must be known to the
true owner. This could happen if the true owner sees the person in possession
of the property, or if the true owner is otherwise aware of the person's
possession.
The
determination of whether or not a person's possession is open and notorious is
a factual matter that will be decided by the court. There is no bright-line
rule and the factors that will be considered will vary from case to case.
Some factors that the
court may consider include:
·
The nature of the property. Is the property
visible from the public road?
·
The location of the property. Is the property
located in a remote area or in a busy area?
·
The activities of the person in possession. Is
the person using the property in a way that would make it obvious to the true
owner that they are in possession?
·
The knowledge of the true owner. Did the true
owner know or have reason to know that the person was in possession of the
property?
7.1.4 Continuous Possession
The possession must be continuous,
which means that the person must be in possession of the property for the
entire period of time required for adverse possession to occur. The period of
time required for adverse possession to occur varies from state to state, but
it is typically 10 to 20 years.
The possession must be
uninterrupted and unbroken. If the person leaves the property for a significant
period of time, they will not be able to acquire ownership through adverse
possession.
There are a few exceptions to the
continuous possession requirement. For example, if the person is temporarily
absent from the property due to military service or illness, the possession
will not be interrupted.
The determination of whether or not
a person's possession is continuous is a factual matter that will be decided by
the court. There is no bright-line rule and the factors that will be considered
will vary from case to case.
Some factors that the court may
consider include:
·
The length of the absence from the property.
·
The reason for the absence from the property.
·
The nature of the property.
·
The activities of the person in possession
before and after the absence.
·
The knowledge of the true owner.
7.1.5 Exclusive Possession
The possession must be exclusive,
which means that the person must be the only one in possession of the property.
This means that the person must not share the property with anyone else,
including the true owner.
If there are other people who are
also in possession of the property, the person cannot acquire ownership through
adverse possession.
There are a few exceptions to the
exclusive possession requirement. For example, if the person has a license from
the true owner to allow others to use the property, the possession will still
be considered exclusive.
The determination of whether or not
a person's possession is exclusive is a factual matter that will be decided by
the court. There is no bright-line rule and the factors that will be considered
will vary from case to case.
Some factors that the court may consider include:
·
The nature of the property. Is the property
large enough for multiple people to use?
·
The activities of the people in possession. Are
the people using the property in a way that suggests that they are sharing it?
·
The knowledge of the true owner. Did the true
owner know or have reason to know that other people were using the property?
Benefits of Adverse Possession: If a person successfully establishes adverse possession,
they will acquire ownership of the property. This means that they will have the
same rights as the true owner, including the right to sell the property or
mortgage it.
Risks of Adverse Possession: There are also some risks associated with adverse
possession. For example, if the true owner discovers that adverse possession is
occurring, they may file a lawsuit to reclaim the property. If the true owner
is successful, the person who was in adverse possession may be required to pay
damages.
7.2 Benefits of Adverse Possession
·
Ownership of the property: If a person
successfully establishes adverse possession, they will acquire ownership of the
property. This means that they will have the same rights as the true owner,
including the right to sell the property or mortgage it.
·
Security of tenure: Once a person has
acquired ownership of property through adverse possession, they will have a
very strong right to keep the property. The true owner will not be able to take
the property back, even if they learn of the adverse possession and try to take
legal action.
·
Tax benefits: The person who has acquired
ownership of the property through adverse possession may be eligible for
certain tax benefits, such as the ability to deduct property taxes from their
income.
·
Equity: The person who has acquired
ownership of the property through adverse possession may be able to use the
property as collateral for a loan, which can help them to improve their
financial situation.
7.3 Risks of Adverse Possession
·
The true owner may challenge the adverse
possession. The true owner of the property may challenge the adverse
possession and seek to regain ownership of the property. This could result in a
lengthy and expensive legal battle.
·
The person who has been in possession of the
property may lose their rights to the property. If the true owner
successfully challenges the adverse possession, the person who has been in
possession of the property may lose their rights to the property. This could
mean that they have to vacate the property and return it to the true owner.
·
The person who has been in possession of the
property may be liable for damages to the true owner. If the true owner can
prove that they have suffered damages as a result of the adverse possession,
the person who has been in possession of the property may be liable for those
damages.
·
The person who has been in possession of the
property may be required to pay taxes on the property. Even if the person
who has been in possession of the property is not the legal owner of the
property, they may still be required to pay taxes on the property. This could
be a significant financial burden.
·
The adverse possession may not be valid.
The requirements for adverse possession vary from state to state and there are
many exceptions to the rule. If the person who has been in possession of the
property does not meet all of the requirements, the adverse possession may not
be valid.
