Limitation Periods Under German Law

The regular limitation period in German law

Limitation periods decide whether a valid claim can still be enforced, and most claims under German civil law become time-barred after three years. Under § 195 of the Civil Code (Bürgerliches Gesetzbuch, BGB), the regular limitation period (regelmäßige Verjährungsfrist) is three years, and under § 199(1) BGB it starts at the end of the calendar year in which the claim arose and the creditor learned, or without gross negligence should have learned, of the circumstances giving rise to the claim and the identity of the debtor. A claim that arose and became known in March 2023 therefore becomes time-barred at the end of 31 December 2026.

Limitation periods do not extinguish the claim; they give the debtor a defence that it must raise (§ 214 BGB). Courts do not consider limitation of their own motion, and a debtor who pays a time-barred claim cannot reclaim the payment. A time-barred claim may still be used for set-off if it was not yet barred when the claims first faced each other (§ 215 BGB).

This "year-end" rule makes 31 December the busiest filing date in German litigation. For businesses, it also means that limitation periods for routine commercial claims — unpaid invoices, damages for breach of contract, claims for repayment — can be managed in an annual review. The difficulty lies in the exceptions: special periods for defects, objective maximum periods, suspension during negotiations and contractual changes.

Knowledge, gross negligence and maximum periods

The subjective element in § 199(1) no. 2 BGB is fact-based. The creditor must know, or be grossly negligent in not knowing, the facts that ground the claim and who the debtor is. It is not necessary to have drawn the correct legal conclusions. Where a company's knowledge is concerned, the knowledge of the employees responsible for the matter is generally attributed to it, which is why internal reporting lines matter for limitation.

Because knowledge can arrive late, the law sets objective maximum periods regardless of knowledge (§ 199(2)–(4) BGB):

• damages claims for injury to life, body, health or freedom: 30 years from the act or event;
• other damages claims: ten years from when the claim arose, and in any event 30 years from the act or event, whichever ends earlier;
• other claims: ten years from when they arose.

For injunctive claims, the infringement replaces the point at which the claim arises (§ 199(5)).

Special limitation periods businesses meet most often

Many commercial claims follow special rules that start on a fixed event rather than on knowledge. The following table lists those businesses meet most often.

Defect claims in sales contracts are the classic trap. The two-year period under § 438 BGB runs from delivery, irrespective of when the buyer discovers the defect, unless the seller fraudulently concealed it, in which case the regular period applies (§ 438(3)). Work and construction contracts have parallel rules in § 634a BGB. In M&A, sale and purchase agreements typically replace these rules with negotiated periods for warranty and indemnity claims; see our insight on post-M&A disputes.

Corporate liability claims deserve particular attention. Claims of a GmbH against its managing directors become time-barred five years after they arise (§ 43(4) of the Limited Liability Companies Act, GmbH-Gesetz, GmbHG), and claims of an AG against board members after ten years for listed companies and five years for others (§ 93(6) of the Stock Corporation Act, Aktiengesetz, AktG). These periods run from accrual, not knowledge, so a new management team that discovers historical breaches may have less time than it assumes. Supervisory boards should therefore review potential claims against former management promptly; see our insight on managing director liability in the GmbH.

Transport and logistics claims are another area with short periods: claims arising from carriage of goods under the Commercial Code (Handelsgesetzbuch, HGB) expire after only one year from delivery, or three years in cases of intent or equivalent fault (§ 439 HGB).

Suspension: negotiation, litigation and other events

Suspension (Hemmung) stops the clock; the period during suspension is not counted (§ 209 BGB). The most important ground in practice is negotiation. Under § 203 BGB, limitation is suspended while the parties negotiate about the claim or the circumstances giving rise to it, until one of them refuses to continue the negotiations. Limitation then occurs at the earliest three months after the suspension ends.

German courts interpret "negotiations" broadly: any exchange of views that the creditor may understand as the debtor engaging with the claim can suffice, unless the debtor immediately and clearly rejects it. Negotiations can also "fall asleep" when one side stops responding, and the suspension then ends at the point when the next step would have been expected. Because the start and end of negotiations are often disputed, relying on § 203 alone is risky.

Other important suspension grounds under § 204(1) BGB include:

1. filing a claim for payment or declaratory relief (no. 1);
2. service of a payment order in summary proceedings (Mahnbescheid) (no. 3);
3. service of a third-party notice (Streitverkündung) (no. 6);
4. service of an application for independent evidence proceedings (no. 7);
5. the start of an agreed expert determination (no. 8);
6. the start of arbitral proceedings (no. 11).

Suspension under § 204(1) ends six months after the proceedings conclude by final decision or otherwise (§ 204(2) BGB). In mass claims, registration for a VDuG redress action or a KapMuG model case suspends limitation; see our insights on redress actions and on expert evidence and independent evidence proceedings.

Hypothetical timeline

Illustration: a buyer receives a defective production line on 15 May 2025. The two-year period for defect claims would end on 15 May 2027. The parties exchange correspondence about repairs from October 2025 until the seller declares in writing on 31 March 2026 that it will not discuss the matter further. The negotiation period of roughly five and a half months is not counted, so the buyer's claim now expires around the end of October 2027, and in any event not before three months after the end of the negotiations.

Restart of the limitation period

A limitation period starts again in full if the debtor acknowledges the claim to the creditor — by part payment, interest payment, providing security or in any other way — or if enforcement measures are applied for or carried out (§ 212 BGB). An acknowledgment need not be express; conduct showing that the debtor is aware of the debt can suffice. Debtors therefore need to be careful when making goodwill payments or discussing payment plans without a reservation.

Contractual changes to limitation periods

German law allows parties to shorten or extend limitation periods by agreement, within limits. Under § 202 BGB, liability for intent cannot be eased in advance, and limitation cannot be extended beyond 30 years from the statutory start. Within those limits, three tools are common in commercial practice:

• Waiver of the limitation defence (Verjährungsverzicht): the debtor agrees not to raise limitation until a certain date, often during settlement talks. It should be in writing, state an end date and specify whether it covers claims already time-barred.
• Standstill agreements: the parties agree that limitation is suspended for a defined period, commonly with a notice clause to end the standstill.
• Contractual limitation clauses: supply, construction and M&A contracts frequently set their own periods for warranty, indemnity and damages claims.

Where limitation clauses appear in standard terms (Allgemeine Geschäftsbedingungen), they are subject to content review under §§ 307 ff. BGB, even between businesses. Shortening the period for defects in newly manufactured goods or for damages claims based on gross fault is particularly sensitive. Our insights on standard terms in B2B contracts and on limitation of liability clauses set out the drafting boundaries.

Limitation periods in cross-border and arbitration settings

For contracts governed by German law, the BGB rules apply as substantive law even where proceedings take place abroad or in arbitration; under the Rome I Regulation, limitation is governed by the law applicable to the contract. For tort claims, the Rome II Regulation applies the law of the tort. In arbitration seated in Germany, the start of arbitral proceedings suspends limitation (§ 204(1) no. 11 BGB); arbitral proceedings commence on the date the respondent receives the request for arbitration unless agreed otherwise (§ 1044 ZPO). Institutional rules may define commencement differently, for example by reference to receipt of the request by the institution.

Parties to international contracts should therefore check how their chosen rules define commencement. See our page on international arbitration.

Practical checklist for managing limitation periods

Businesses can reduce limitation risks with a few routines:

1. maintain a register of open claims with the event that triggers each period (knowledge, delivery, handover, end of infringement);
2. run a year-end review in October and November so that claims expiring on 31 December can be secured in time;
3. document when negotiations start and end, and confirm standstills in writing;
4. check acknowledgments and payments for unintended restarts on the debtor side;
5. align contractual limitation clauses across the supply chain so that recourse claims do not expire before your own liability.

How TRW & Co helps with limitation periods

We advise companies on limitation periods at every stage of a dispute: assessing when a claim becomes time-barred, drafting and negotiating waivers and standstill agreements, securing claims through court filings, payment orders or third-party notices, and defending against claims on limitation grounds. In contract work, we draft limitation clauses that hold up under the standard terms review and fit the client's supply chain. Our commercial litigation team regularly handles year-end filing programmes for clients with large claim portfolios. To review your exposure or a specific claim, contact us.