To recover commercial debt, establish the underlying contract, payment due date, acceptance evidence, remaining principal and limitation period. Article 129 of the Civil Code generally gives three years for contractual claims; for applicable civil money claims, the first-instance duty is generally 3% with a GEL 100 minimum. A demand letter is useful evidence but does not universally suspend the limitation clock.
Applicable legislation: Civil Code of Georgia, Civil Procedure Code, Law of Georgia on Enforcement Proceedings
Debt amount, evidence and limitation
Separate the contract principal, penalty and any independently justified loss. Ordinary limitation for contractual claims is generally three years under the Civil Code, though special provisions may apply. Determine when the particular claim became enforceable.
Link the contract, performance evidence, invoice, demand letter and response. A bank transfer does not on its own prove that the seller delivered the agreed quantity or that a service was accepted.
Relevant statutory provisionKey conditions and figures
Proving the debt
An invoice may not independently prove performance. Assemble the contract, orders, delivery certificates, correspondence, banking records and partial payments. Establish when payment fell due and whether contractual acceptance or objections periods apply.
Demand and settlement
A written demand should identify the obligation, amount, basis and a practical response channel. If negotiating instalments, specify dates and default consequences. Compare the economic value of settlement with litigation cost and the prospect of enforcing any judgment.
Claim and recovery
Before filing, consider jurisdiction, any arbitration clause, limitation and interim protection. Winning does not guarantee payment. Assess assets, security, enforcement costs and competing creditors before proceeding.
Read the payment clause precisely
Distinguish advances, milestones, acceptance-triggered payments and debts arising after actual delivery. If invoicing triggers payment, retain proof of invoice service. A single contract may create several maturity dates. Each part of a claim should be tied to its date and source.
Settlement documentation
An instalment agreement should state what debt is acknowledged and what remains disputed. Consider default consequences, security or guarantees. Avoid ambiguous wording that unintentionally replaces the original obligation or waives other rights.
Before sending the formal demand
Reconstruct the debt from contract, order, invoice, delivery or acceptance evidence, payment records and objections. Separate principal, contractual penalties and interest rather than demanding an unexplained total. Draft a demand with a clear calculation and response date. A partial settlement should state what remains owing and whether any rights are waived. Evaluate litigation together with the debtor's recoverable assets, not in isolation.
Why an invoice may not establish the whole claim
An invoice states a charge but may be disputed for non-delivery, quality, date of acceptance or agreed price. Support it with the contract, purchase order, acceptance records, transport or electronic delivery evidence and a payment ledger. Deduct payments received and separate penalties. Disputed change orders and creditor delay require distinct legal treatment.
What to include in a formal demand
Identify the parties, contract and invoice references, breakdown of the unpaid amount, payment deadline and bank details. Describe only remedies that are supported by law or contract. Preserve delivery evidence. An unsupported threat of criminal proceedings is not a substitute for a civil debt claim.
A limitation timeline example
If contractual payment fell due on 15 March 2024, a three-year ordinary period is only a starting point. Compute each claim separately, considering accrual, knowledge and statutory interruption/suspension. Invoices may have different due dates. Do not assume that a payment promise automatically resets every limitation calculation.
From filing to enforcement: practical cost
For a GEL 10,000 monetary claim, 3% is GEL 300 before checking the CPC’s relevant exceptions, caps and relief. Assess debtor assets, interim remedies, enforcement cost and the security of any settlement. A favorable judgment is only part of recovery; litigation against an assetless debtor may be commercially disproportionate.
A reconciliation schedule for an unpaid invoice
Assume a contract price of GEL 40,000, accepted performance of GEL 32,000, and GEL 20,000 already paid. Claiming the full contract price may be wrong. Check when payment became due: against an advance milestone, interim acceptance or final performance. If GEL 32,000 is accepted and GEL 20,000 has been allocated to it, the unpaid balance on that certified portion is GEL 12,000; the remaining GEL 8,000 of contract value requires a separate performance and payment analysis. Defects, set-off and penalties may also be contested. Build a table of period, performance, evidence, invoicing, payment, adjustments and balance. Every row should be auditable. This is an illustrative calculation, not an actual client matter.
Negotiation, settlement and enforcement strategy
A demand letter does not mean negotiation should continue indefinitely. Track limitation and the debtor’s ability to pay. If the debtor acknowledges the balance and requests instalments, record clear dates, default consequences, security if appropriate and the precise scope of released claims. If performance is denied, focus on acceptance evidence, contractual interpretation and delivery records. An asset in the debtor’s name does not automatically mean attachment or forced sale is available; enforcement has its own legal framework. Separate admitted principal, disputed penalties and provable damages. Claiming the same loss twice or overstating charges undermines the case. Success is measured in cash recovered after time and cost, not only a judgment on paper.