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ACT ON THE TIME LIMIT FOR PERFORMANCE OF A MONETARY OBLIGATION

Act on the time limit for performance of a monetary obligation entered into force on 1st January 2012, and therefore, the provision from article 174 of the Civil Obligations Act, ceased to have effect. According to this, now invalid provision that refers to commercial contracts, the debtor was liable to fulfill his monetary obligation within 30 days, unless a (shorter) time period was determined by the commercial contract.

This Act now defines the time limit for performance of monetary obligations among the entrepreneurs themselves, i.e. the entrepreneurs and corporate bodies under public law, it defines legal consequences of late payments, with the final purpose of preventing non-performance of monetary obligations.

If a monetary obligation, emerging from a contract, is not paid, one can be prosecuted for the minor offence and high fines are defined for debtors (up to 1 million Kuna) and for the responsible person (up to 50.000,00 Kuna). Relative statute of limitations of minor offence proceedings is three years after the default, while the absolute statute of limitations of minor offence proceedings is 6 years.

Among entrepreneurs, the time limit for performance of monetary obligations may be up to 60 days, and only on exceptional basis may it be prolonged. Between entrepreneurs and corporate bodies under public law it is up to 30 days and may be prolonged for a maximum time period of 60 days.

If the time limit for performance is not defined by the contract, the debtor is obligated (without any notice from the creditor) to fulfill his/her monetary obligation within the 30 days time-period, as it was prescribed by the abolished provision of the Civil Obligations Act. In this case this time period will start running:

– as of the day on which the debtor received an invoice or some other appropriate request for payment,

– as of the day on which the creditor performed his obligation, if it is not possible to determine with certainty the day the debtor received the invoice or some other appropriate request for payment, or if the debtor received an invoice or some other appropriate request for payment before the creditor performed his obligation,

– as of the day of expiry of the time limit for inspection of the subject of obligation, if a time limit for such an inspection has been stipulated by contract or law, and the debtor has received an invoice or some other appropriate request for payment prior to expiry of such time limit.