Pactum de non petendo

Pactum de non petendo – this legal phrase comes from Latin. Literally it means “an agreement not to litigate”. Briefly, it is formed from the Latin words “pactum” (agreement) and “petendo” (sue). In many legal systems it details a concluded agreement in favor of the debtor, via which contract the creditor obliges not to enforce the debt at the local court, until certain deadline occurs. In simple words, with pactum de non petendo the debtor buys some more time (i.e. gets additional term) for re-payment of their debt towards the creditor. In the sphere of banking Law it is called “re-financing instrument”, used by parties for amendment of the initially agreed terms and conditions for repayment of the loan. An example is if you obtain a mortgage loan, but at some time you are not able to cover the installments and meet the deadline for re-payment. Then usually you can negotiate with the bank signing of an annex to increase of this deadline with embedded promise by the bank not to sue you during this additional term. Where respectively you get additional time to collect finances.

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