Third-Party Debt Payment in Czech Law: Supreme Court Shift in 2025

It may happen that your business partner or a third party pays a debt on your behalf – and the creditor refuses the payment. How does Czech law view such a situation, and what does the latest case law of the Supreme Court say? In this article, you will learn when a creditor is obliged to accept performance from a third party, under what conditions the creditor is entitled to refuse it, and how the case law shifted significantly in 2025. We provide specific answers supported by an analysis of the key Supreme Court judgment, file no. 21 Cdo 293/2025.

Quick summary

• A creditor cannot automatically refuse a third party’s payment – under Section 1936(1) of the Czech Civil Code, the creditor must accept performance offered by a third party with the debtor’s consent, unless the obligation is of a personal nature.
• The debtor’s consent may also be implied – it is sufficient if the debtor provides the third party with the creditor’s payment details (bank account number, variable symbol, amount of the debt). In judgment file no. 21 Cdo 293/2025, the Supreme Court confirmed that formal delivery of the consent to the creditor is not necessary.
• Performance by a third party extinguishes the debt even without the debtor’s consent – current Czech case law (R 78/2024) expressly states that the debt is extinguished even if the third party performed without the debtor’s consent, while the third party acquires a recourse claim based on unjust enrichment.
• A creditor’s refusal of payment may put the creditor in default – if the creditor unjustifiably refuses to accept proper performance, the creditor is in default, which may have serious legal and financial consequences under Czech law.

What does Czech law say about performance by a third party?

The basic legal framework for performance of a debt by a third party is Section 1936 of Act No. 89/2012 Coll., the Civil Code of the Czech Republic (the “Civil Code”). Under paragraph 1 of this provision, the creditor must accept performance offered by a third party with the debtor’s consent. The only exception is obligations tied to the debtor’s personal qualities – typically contracts in the arts sector or obligations intuitu personae.

Paragraph 2 of the same provision then governs a situation where a third party performs another person’s debt without guaranteeing or otherwise securing that debt. Such a person may request the creditor to assign its claim to them – this is the concept of subrogation (stepping into the creditor’s rights), which is regulated in more detail in the follow-up Section 1937 of the Civil Code. Subrogation recourse, i.e., the performer’s right to seek reimbursement from the debtor for what was paid on the debtor’s behalf, is a key protective mechanism of the entire legal framework under Czech legislation.

In practice, this is a fairly common situation – for example, when a parent company pays the debt of its subsidiary, a business partner pays an invoice for its counterparty, or a third party provides a loan specifically intended to pay a particular debt of the debtor. It was precisely this last scenario that was the subject of a key Supreme Court judgment in 2025.

Related questions on the statutory regulation of performance by a third party

1.  Must the third party inform the creditor that it is paying on behalf of the debtor? Yes, it must be clear between the third party and the creditor that the payment is made towards the debt of a specific debtor. Payment identification (variable symbol, message in the payment order) is therefore crucial.

2. Can the creditor refuse payment on the grounds that it does not know the third party? The mere fact that the creditor does not know the third party is not a reason to refuse performance. What matters is whether the debtor’s consent exists and whether the performance corresponds to the content of the obligation under Czech law.

3.  What happens if the third party pays only part of the debt? As a rule, the creditor is not obliged to accept partial performance, unless it concerns a performable and separable part of the obligation. In case of doubt, it is advisable to proceed with the consent of all parties involved.

Mgr. Petr Valent, LL.M.

associate, partner

• valent@arws.cz

Mgr. Pavel Čech

associate

• pavel.cech@arws.cz

How does the Supreme Court interpret Section 1936 of the Czech Civil Code?

Of key importance is the judgment of 29 October 2025, file no. 21 Cdo 293/2025, in which the Supreme Court set out its approach to interpreting the conditions under which a creditor is entitled to refuse performance offered by a third party.

Factual background of the case

The claimant (a joint-stock company) entered into a loan agreement with a bank in the amount of CZK 30,000,000 secured by a pledge over real estate. After the loan became due, the claim was assigned to an investment fund, which called on the debtor to pay. The debtor entered into a loan agreement with another company, which, based on that loan agreement, sent to the account of the investment fund’s legal representative an amount corresponding to the entire debt – exactly in accordance with the creditor’s instructions, to the correct account, with the correct variable symbol, and with a breakdown of the individual amounts.

However, the investment fund refused the performance and returned the amount, claiming it constituted unjust enrichment because it had not been provided with proof of the debtor’s consent to performance by a third party. Subsequently, a share in the claim was assigned to a foreign company. The debtor then brought an action before the Czech courts seeking a declaration that the pledge did not exist.

How did the lower courts decide?

The District Court in Blansko upheld the claim and concluded that the debtor’s consent to performance by a third party had been clearly given, and the creditor was therefore obliged to accept the performance. By refusing the performance, the creditor was in default.

The Regional Court in Brno, however, amended the District Court’s judgment and dismissed the claim. It concluded that the mere existence of the debtor’s consent is not sufficient – the consent must reach the creditor’s “sphere of control”. Because the creditor demonstrably did not know about the debtor’s consent at the moment of receiving the payment, it was entitled to refuse the performance.

Conclusion of the Supreme Court

The Supreme Court quashed the appellate court’s judgment and remitted the case for further proceedings. In its reasoning, it formulated several key legal conclusions that change the existing approach to interpreting Section 1936(1) of the Civil Code.

First, the Supreme Court pointed to its earlier shift in case law reflected in the decision published as R 78/2024 in the Collection of Court Decisions and Opinions (judgment of 17 October 2023, file no. 28 Cdo 1214/2023). In that decision, the Supreme Court expressly stated that a third party may perform to the creditor on behalf of the debtor with the effect of discharging the debt and giving rise to a restitutionary claim for performance for another, even without the debtor’s consent. This conclusion was subsequently confirmed by recent case law, including the Supreme Court’s resolution of 26 June 2025, senate file no. 29 ICdo 65/2024, and the resolution of 21 May 2025, file no. 28 Cdo 3091/2024.

Second, the Supreme Court posed a logical question: if performance by a third party extinguishes the debt even without the debtor’s consent (or even against the debtor’s will), what economic or legal sense does it make for the creditor to refuse performance offered by a third party, if the creditor has not agreed an explicit prohibition of third-party performance with the debtor?

Third, the Supreme Court concluded that the interpretation of Section 1936(1) of the Civil Code should move closer to the rule contained in the German Civil Code (Bürgerliches Gesetzbuch), specifically Section 267 BGB.

Comparison with German legislation: Section 267 BGB

In its judgment 21 Cdo 293/2025, the Supreme Court of the Czech Republic expressly referred to German legislation as an interpretative model. Section 267 of the German Civil Code (BGB) provides:

• Paragraph 1: If the debtor is not required to perform personally, performance may also be provided by a third party. The debtor’s consent is not required.
• Paragraph 2: The creditor may refuse performance only if the debtor expressly objects to performance by a third party.

The Czech legislation in Section 1936(1) of the Civil Code does expressly state that the creditor “must accept performance offered to them by a third party with the debtor’s consent”; however—as emphasised by legal literature and the Supreme Court of the Czech Republic—it does not contain an explicit rule for a situation where the debtor is inactive, i.e., has not expressly given consent but has not refused it either.

It is precisely in this respect that the Supreme Court concluded that the creditor may refuse performance offered by a third party instead of the debtor only if, in view of all the circumstances, it is obvious that the debtor did not give consent to such performance.

Related questions on comparing Czech and German legislation

1.  Is German legislation binding on Czech courts? No, it is not a legally binding source. However, the Supreme Court of the Czech Republic uses it as an interpretative aid when construing Czech law, especially where the Czech provision is based on a similar concept.

2. Can a creditor contractually prohibit performance by a third party? Yes, the parties may agree that the debt must be performed exclusively by the debtor. However, such a prohibition must be expressly agreed in the contract.

How is the debtor’s consent proven?

One of the most practical aspects of judgment 21 Cdo 293/2025 is its interpretation of the form and manner in which the debtor’s consent to performance by a third party is granted. The Supreme Court of the Czech Republic clearly concluded that the debtor’s consent to a third party performing their debt within the meaning of Section 1936(1) of the Czech Civil Code constitutes a unilateral, addressed legal act made in relation to the third party—not to the creditor.

This legal act may be made in any form, including implicitly. Implicit consent is considered, in particular, a situation where the debtor provides the third party with all payment details necessary to settle the debt—the creditor’s bank account number, variable symbol, the amount of the debt, and a breakdown of the individual amounts.

In the case at hand, the company performed the debtor’s debt exactly according to the creditor’s instructions—into the account stated in the pre-action demand letter, with the correct variable symbol and with an exact breakdown of the payment of principal, interest and the costs of the pre-action demand. The Supreme Court of the Czech Republic stated that, in these circumstances, the creditor objectively could not have had any doubts that the third party was performing with the debtor’s consent.

Attorneys at ARROWS, a Prague-based law firm, have long specialised in the area of obligations law and dispute resolution arising from credit relationships. If you are dealing with a situation where a third party has paid or is to pay a debt on behalf of your company, or conversely, as a creditor you are facing a payment from an unknown third party, our attorneys in Prague can help you assess the situation correctly under Czech law and protect your interests. Write to us at office@arws.cz.

Related questions on the debtor’s consent

1.  Must the debtor’s consent be in writing? No. Czech law does not prescribe a mandatory form of consent. It may be granted orally, in writing, or implicitly (e.g., by providing payment details to a third party).

2. Can the debtor grant consent in advance, for example in a loan agreement? Yes. The consent may be included directly in the agreement between the debtor and the third party on the basis of which the third party is to perform for the debtor.

3.  What if the creditor claims they did not know about the consent? Under the current case law of the Supreme Court of the Czech Republic, it is not decisive whether the consent reached the creditor’s “sphere of control”. The creditor may refuse performance only if it is obvious that the debtor did not provide consent.

What does refusing a payment mean for a creditor in practice?

If a creditor refuses proper performance offered by a third party on behalf of the debtor, they expose themselves to significant legal risks. Under Czech case law, refusing payment may mean that the creditor is in creditor’s default (mora creditoris) within the meaning of Section 1975 et seq. of the Czech Civil Code. The consequences of creditor’s default include, in particular, that default interest stops accruing for the debtor and the creditor bears the risk of damage to the subject matter of performance.

In the case at hand, after the payment was refused, the debtor deposited the relevant amount into court custody under Section 1953 of the Czech Civil Code. This ensured that the performance was deposited and her debt could be considered discharged. In its judgment, the Supreme Court of the Czech Republic also addressed the question of whether the deposit into court custody was justified, while the appellate court had incorrectly denied the debtor this option.

Similar situations may lead to losses amounting to millions of Czech crowns in interest, accessories and litigation costs. That is precisely why, in practice, it is extremely important for creditors, debtors and third parties to correctly assess their rights and obligations under Czech law.

How has the Supreme Court’s case law developed?

The issue of performance by a third party has undergone dramatic development in recent years. To properly understand the current state of affairs, it is useful to know the key milestones:

Supreme Court judgment ref. no. 29 Cdo 306/2022 – In this decision, the Supreme Court expressed the view that a creditor must accept performance by a third party only if two legal acts enter the creditor’s “sphere of control”: the third party’s offer of performance and the debtor’s consent. However, this judgment was annulled by a finding of the Constitutional Court dated 10 January 2024, ref. no. IV. ÚS 2151/23.

R 78/2024 (Supreme Court judgment ref. no. 28 Cdo 1214/2023 dated 17 October 2023) – The Supreme Court concluded that the debtor’s consent to a third party performing the debtor’s debt is not necessary for unjust enrichment to arise through performance for another within the meaning of Section 2991(2) of the Czech Civil Code. A third party may therefore validly discharge another person’s debt even without the debtor’s consent.

Supreme Court judgment ref. no. 21 Cdo 293/2025 (dated 29 October 2025) – The judgment analysed in detail above in this article, which completes the overall picture and formulates the rule that a creditor may refuse performance by a third party only where it is apparent that the debtor did not give consent.

This development shows a clear trend towards strengthening the protection of the debtor and the third party, at the expense of an interpretation favouring the creditor under Czech law.

Related questions on the development of case law

1.  Is the Supreme Court’s decision 21 Cdo 293/2025 binding on other courts? The legal opinion expressed by the Supreme Court in a cassation decision is binding on the court to which the case was remitted for further proceedings. For other courts in the Czech Republic, it represents a persuasive interpretative source from which they may depart only with compelling reasoning.

2. Can the case law still change? In principle, yes. Judicial decision-making practice evolves.

What does this mean for creditors, debtors and third parties?

In practice, this issue is far more complex than it may seem at first glance. Each individual case involves a number of procedural details, links to other regulations, and hidden risks that non-lawyers often do not see. Here are the main practical implications of the current Czech case law:

For creditors:

• Refusing payment from a third party is justified only in exceptional cases – in particular where it is apparent that the debtor does not consent to the performance, or where the obligation is of a personal nature.
• Before refusing performance, it is essential to carefully consider all circumstances – an incorrect refusal may result in the creditor being in default and the security lapsing.
• If the creditor wishes to exclude performance by a third party, this must be done by an express contractual arrangement.

For debtors:

• If you want a third party to pay the debt on your behalf, make sure the third party has all of the creditor’s payment details and that the payment is sufficiently identified (variable symbol, message to the recipient).
• If the payment is refused, consider depositing the amount due into court escrow in the Czech Republic.
• Consent to performance by a third party may also be given implicitly – by providing payment details and payment instructions.

For third parties (performers):

• If you are paying on behalf of a debtor, make sure you have the debtor’s consent and that the payment is properly identified.
• Even without the debtor’s consent, you may acquire a claim for unjust enrichment (Section 2991(2) of the Czech Civil Code); however, your procedural position is more complicated in such a case.
• Ensure that it is clear from the payment which debtor you are performing for and which specific debt is being discharged.

ARROWS advokátní kancelář deals with obligations law, banking disputes and debt recovery on a daily basis. The firm’s portfolio includes more than 150 joint-stock companies and 250 limited liability companies, and the Czech legal team at ARROWS advokátní kancelář has extensive experience in handling disputes with an international element thanks to the ARROWS International network built over ten years. Do you need to assess whether third-party performance is duly made in your case under Czech law? Email us at office@arws.cz.

Conclusion of the article

The Supreme Court judgment ref. no. 21 Cdo 293/2025 represents a fundamental shift in the interpretation of Section 1936(1) of the Czech Civil Code. Under the new approach, a creditor may refuse performance offered by a third party instead of the debtor only where, in light of all circumstances, it is apparent that the debtor did not give consent to such performance. The debtor’s consent may be given in any form, including implicitly – for example, by providing payment details to the third party.

This development in Czech case law has far-reaching practical implications for creditors, debtors and third parties. An incorrect refusal of payment may result in the creditor being in default, the security lapsing, costly litigation in Czech courts, and liability for damages. On the other hand, third parties should be aware that even without the debtor’s consent they may validly discharge another person’s debt; however, their recourse position will depend on the specific circumstances of the case.

FAQ – Most common legal questions on third-party performance for the benefit of a creditor

1.      Can anyone pay my debt for me, even without my consent?
Yes. Under the current case law of the Supreme Court, a third party may discharge a debtor’s debt even without the debtor’s consent, and the debt will be extinguished. In such a case, the third party acquires a recourse claim based on unjust enrichment. If you are dealing with a similar situation in the Czech Republic, contact ARROWS advokátní kancelář at office@arws.cz.

2.     As a creditor, do I have to accept payment from a third party I do not know?
If a third party performs in accordance with the instructions that correspond to your receivable (correct account, variable symbol, amount of the debt), and it is not apparent that the debtor disagrees with the performance, you are obliged to accept the performance under Czech law. Refusal without legal grounds may result in your default as the creditor. To assess your specific situation, consult ARROWS, a Prague-based law firm, at office@arws.cz.

3.      What should I do if the creditor refused a third-party payment of my debt?
Consider depositing the outstanding amount into court escrow under Section 1953 of the Czech Civil Code. At the same time, send the creditor a written request to accept performance. If you need assistance with the legal solution, contact ARROWS, a Prague-based law firm, at office@arws.cz.

4.     Will a pledge terminate if the debt is paid by a third party?
Yes. If the secured debt is extinguished by a third party’s performance, the pledge also terminates under Section 1376 of the Czech Civil Code. This applies regardless of who actually paid the debt. To verify the impact on your security in the Czech Republic, contact ARROWS, a Prague-based law firm, at office@arws.cz.

5.      Can a creditor contractually exclude the possibility of performance by a third party?
Yes, the parties may agree in the contract that the debt must be performed exclusively by the debtor. However, without such an express arrangement, the creditor cannot automatically refuse performance by a third party. Our attorneys in Prague at ARROWS, a Prague-based law firm, will be happy to assist you with drafting and reviewing contracts—write to office@arws.cz.

6.  How can I protect myself as a third party who paid someone else’s debt and the debtor does not want to reimburse me?
You are entitled to restitution of unjust enrichment under Section 2991(2) of the Czech Civil Code, or alternatively to a subrogation recourse claim under Section 1936(2) and Section 1937 of the Czech Civil Code. The specific approach depends on the circumstances of the case. Are you dealing with a similar issue in the Czech Republic? Contact ARROWS, a Prague-based law firm, at office@arws.cz.

“Notice: The information contained in this article is of a general informational nature only and is intended to provide basic guidance on the topic. Although we strive for maximum accuracy, legal regulations and their interpretation evolve over time. To verify the current wording of the regulations and their application to your specific situation, it is therefore necessary to contact ARROWS, a Prague-based law firm, directly (office@arws.cz). We accept no liability for any damages or complications arising from the independent use of the information in this article without our prior individual legal consultation and professional assessment. Each case requires a tailored solution, so please do not hesitate to contact us.”

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