Few things are as frustrating for a business as discovering that a perfectly valid debt has quietly become unrecoverable, not because the debtor disputes it, but because too much time has passed. Under South African law, prescription does exactly that: after a fixed period, the law extinguishes the debt and, with it, your right to enforce payment through the courts.
For most ordinary commercial debts, that period is three years, as set out in the Prescription Act 68 of 1969. (Some debts run longer. For example, mortgage-secured debts, judgment debts and certain debts owed to the State but three years is the default many businesses are dealing with day to day.) The practical lesson is blunt: sit on your rights, and you may forfeit them.
The good news is that the same Act gives creditors clear tools to interrupt prescription and, in effect, restart the clock. Below we set out how SMEs and larger corporates can put these tools to work.
1. Acknowledgment of liability
The principle. Under section 14 of the Prescription Act, if a debtor acknowledges liability, whether in writing or by conduct. Prescription is interrupted and a fresh three-year period begins to run from the date of that acknowledgment.
What we recommend. Treat verbal admissions as a starting point, not a safety net. Always reduce the acknowledgment to writing, signed and dated by the debtor.
In practice. A client emails to confirm they owe your business R500,000 and proposes to settle in instalments. That email is an acknowledgment of liability, and prescription starts afresh from the date it was sent.
A useful safeguard. In ongoing supply or credit relationships, build acknowledgment-of-debt provisions into your contracts, requiring the debtor to confirm the outstanding balance at regular intervals. This keeps your claims “alive” without you having to chase each one individually.
2. Serving summons or initiating legal process
The principle. Section 15 provides that the service of a summons or the institution of other recognised legal process, interrupts prescription.
The catch most people miss. Interruption by summons is conditional. If you do not pursue the claim to final judgment (for instance, the matter is withdrawn or simply allowed to lapse), the interruption falls away and prescription is treated as never having been interrupted. Serving a summons buys you protection only if you then prosecute the claim.
What we recommend. Don’t leave it to the eleventh hour. Issue summons comfortably before the three-year mark, and once issued, drive the matter forward.
In practice. A supplier sues a retailer for unpaid invoices. Even if litigation drags on for months, prescription remains interrupted, provided the claim is carried through to judgment.
A useful safeguard. Diarise the critical dates and brief your attorneys early. Last-minute instructions invite errors precisely when the stakes are highest.
3. Settlement talks (handle with care)
The risk. This is where businesses most often come unstuck. Negotiations, on their own, do not interrupt prescription. You can be in active discussions with a debtor while the clock continues to run against you.
What we recommend. If you are negotiating, secure either a written acknowledgment of debt or a signed settlement agreement. Either will protect your position; a friendly exchange of “we’re working on it” will not.
In practice. A debtor verbally agrees to pay but keeps postponing signature of the settlement. Without a written acknowledgment, prescription may quietly complete while you wait.
A useful safeguard. Formalise every meaningful concession in writing, as you go.
4. Using contract clauses to manage prescription
Prescription is far easier to manage before a dispute arises than after. Well-drafted agreements can require the debtor to confirm outstanding balances periodically, a built-in acknowledgment mechanism that resets prescription as a matter of routine.
These clauses earn their keep in long-term supply arrangements, financing facilities and other complex commercial relationships where balances accumulate over time. We regularly draft and review such provisions for clients.
5. What the courts have said
Truter and Another v Deysel (2006, SCA). A debt becomes “due” and prescription begins to run, once the creditor knows the identity of the debtor and the facts giving rise to the claim. Knowledge of the underlying facts is what counts; you do not need to have reached the correct legal conclusion about your rights.
Makate v Vodacom (2016, CC). Prescription cannot run against a debt that is not yet enforceable. The period only begins once the debt is actually due and claimable.
The broader pattern. Across commercial disputes, our courts consistently give effect to clear, written acknowledgments as valid interruptions. That judicial attitude is the strongest argument for disciplined documentation.
A practical checklist
- Obtain written acknowledgments of debt from clients and customers.
- Diarise the three-year prescription period for every invoice and contract.
- Issue summons early where payment is not forthcoming and prosecute the claim through to judgment.
- Reduce all settlement arrangements to signed agreements.
- Train your finance and credit-control staff to recognise prescription risk in the collections process.
The bottom line
Prescription can wipe out genuinely valuable claims, but businesses are far from powerless. By insisting on written acknowledgments, issuing summons in good time, formalising settlements and drafting forward-looking contract terms, you can interrupt prescription and keep your rights enforceable. Proactive management of timelines and documentation is what turns a looming legal risk into a position of strength.
This article is provided for general information and does not constitute legal advice. Prescription turns on the specific facts of each matter. For advice on your business’s claims, contact Mayet Attorneys.
