North Dakota: Prejudgment Interest Rules

The short answer

North Dakota splits prejudgment interest cleanly along contract-versus-tort lines, through two separate statutes rather than one comprehensive rule. A contract or debt claim -- one where the damages are "certain or capable of being made certain by calculation" -- draws interest as a matter of right under N.D.C.C. § 32-03-04, at the state's general legal rate of 6% a year (found in a different chapter, § 47-14-05), running from the day the right to recover vested. A tort claim that doesn't arise from contract, or any case involving oppression, fraud, or malice, works completely differently: § 32-03-05 leaves the whole question -- whether to award interest at all, and how much -- to the discretion of the court or jury, with no statutory rate at all. One more wrinkle can undo an otherwise valid claim: under § 32-03-06, simply accepting payment of the full principal waives any claim to interest, unless the contract itself expressly reserves it.

Requirements one by one

Governing law

Two statutes do the work, tucked into the same chapter on damages. § 32-03-04, "Interest on damages," is the general, mandatory provision, but it only reaches damages that are "certain or capable of being made certain by calculation" -- language that in practice describes a contract or debt claim, reinforced by a separate rule, § 32-03-09, that bars recovery of contract damages at all unless they're "clearly ascertainable in both their nature and origin." § 32-03-05, "When interest [is] in discretion of court or jury," is a distinct, narrower provision that instead covers a tort claim not arising from contract, or any case of oppression, fraud, or malice. Critically, neither section states a numeric rate itself -- North Dakota's Supreme Court has repeatedly held that a § 32-03-04 award draws its rate from a completely different chapter of the code: the state's general legal-interest-rate statute, § 47-14-05.

Interest rate

For the mandatory § 32-03-04 track: 6% a year, the "legal rate of interest" set by § 47-14-05 -- unless the parties' own written contract fixes a different rate, up to the usury ceiling in § 47-14-09. For the discretionary § 32-03-05 track: there's no statutory rate at all. The court or jury simply decides what amount of interest, if any, is appropriate.

When interest starts running

Under § 32-03-04, interest runs from "that particular day" the right to recover the certain or calculable damages vested -- ordinarily the date of breach or the date a debt became due -- except for any period the debtor was legally prevented, or prevented by the creditor's own conduct, from paying. § 32-03-05 sets no fixed trigger date at all; because the whole award is discretionary, the court or jury effectively decides both whether interest runs and from when, as part of the same discretionary call.

Contract vs. tort claims

This is North Dakota's central axis, and it's a genuine two-track system rather than a difference in rate alone. A contract or debt claim runs through § 32-03-04's mandatory mechanism, gated by § 32-03-09's separate requirement that the damages be clearly ascertainable in the first place. A tort claim not arising from contract -- or any claim involving oppression, fraud, or malice -- is carved out entirely into § 32-03-05, which hands the whole interest question to the court's or jury's discretion, with no fixed rate. North Dakota's Supreme Court has recognized that a single lawsuit mixing contract and tort or fraud theories can trigger both tracks at once, one mandatory and one discretionary, in the same case.

Mandatory or discretionary

Split exactly along the contract/tort line described above. § 32-03-04 is mandatory once its conditions are satisfied -- the statute says a qualifying claimant "is entitled to recover interest thereon." § 32-03-05 is genuinely discretionary: interest "may be given, in the discretion of the court or jury," meaning there's no entitlement at all unless that discretion is actually exercised in the claimant's favor.

Simple or compound

Neither governing statute -- § 32-03-04 or § 32-03-05 -- says anything about compounding, and this survey didn't locate a North Dakota case resolving simple-versus-compound interest for a prejudgment award under either one specifically. A different, separate statute governing postjudgment interest, § 28-20-34, does say expressly that its own rate "may not be compounded in any manner or form," which suggests North Dakota's general practice leans toward simple interest, but that's not a direct answer for the prejudgment period covered by this page.

Claims against the government

Two parallel chapters cover this, one for the State and one for local government. Claims against the State of North Dakota itself fall under N.D.C.C. ch. 32-12.2, which caps the State's total liability at $500,000 per person and $2,000,000 for any number of claims arising from a single occurrence -- a figure that climbed in yearly steps between 2023 and 2026 -- and bars the State from paying punitive or exemplary damages at all; a state employee acting within the scope of employment is personally immune, with the claim redirected against the State instead. A separate chapter, ch. 32-12.1, extends an identical $500,000-per-person, $2,000,000-per-occurrence cap, and an identical bar on punitive damages, to counties, cities, school districts, and other political subdivisions. Neither chapter's text says whether prejudgment interest counts inside or outside its damages cap, and this survey located no case resolving that question either way.

Other exceptions

§ 32-03-06 creates a real, easy-to-miss trap: "Accepting payment of the whole principal as such waives all claim to interest, unless interest is provided for expressly in the contract." A creditor who simply accepts full payment of the principal amount owed -- without separately reserving or demanding the accrued interest -- can lose the entire interest claim, contract debt or not, unless the underlying contract expressly provides for interest. Separately, § 32-03-09 functions as a gate in front of § 32-03-04 for contract claims: no contract damages, and therefore no § 32-03-04 interest on them, can be recovered at all unless the damages are "clearly ascertainable in both their nature and origin."

What trips people up

The most common mistake is assuming every civil claim in North Dakota draws the same 6% interest. It doesn't -- that mandatory rate belongs only to § 32-03-04's certain-or-calculable-damages track, essentially contract and debt claims. An ordinary tort claim gets no guaranteed rate at all; it's entirely up to the court or jury under § 32-03-05, and a claimant who assumes the 6% figure applies across the board may be badly overestimating a tort recovery.

The second trap is § 32-03-06's principal-acceptance waiver. A creditor who takes a debtor's full principal payment as a way to resolve a dispute quickly -- without expressly reserving the right to collect the accrued interest too -- can find that simply accepting the payment wiped out the interest claim entirely, unless the original contract already spelled out an interest obligation in writing.

Common questions

What's North Dakota's prejudgment interest rate?
For a contract or debt claim, 6% a year under N.D.C.C. § 47-14-05, unless the contract sets its own rate. For a tort claim, there's no fixed rate -- it's up to the court or jury.

Do I automatically get prejudgment interest on a personal injury claim in North Dakota?
No. Ordinary tort claims fall under § 32-03-05, which leaves the entire decision -- whether to award interest, and how much -- to the discretion of the court or jury.

Can I lose my right to interest on a debt just by accepting payment?
Yes, potentially. Under § 32-03-06, accepting payment of the whole principal waives any claim to interest unless the contract expressly provides for it.

Can I get prejudgment interest if I sue the State of North Dakota or a county?
Possibly, but any recovery is capped -- $500,000 per person and $2,000,000 per occurrence for either the State or a political subdivision, with no punitive damages allowed at all. This survey found no case addressing whether prejudgment interest itself counts inside or outside that dollar cap.

Statutes and sources

• N.D.C.C. § 32-03-04 -- "Every person who is entitled to recover damages certain or capable of being made certain by calculation, the right to recover which is vested in the person upon a particular day, also is entitled to recover interest thereon from that day, except for such time as the debtor is prevented by law or by the act of the creditor from paying the debt." Accessed 2026-07-05: https://ndlegis.gov/cencode/t32c03.pdf
• N.D.C.C. § 32-03-05 -- "In an action for the breach of an obligation not arising from contract and in every case of oppression, fraud, or malice, interest may be given in the discretion of the court or jury." Accessed 2026-07-05: https://ndlegis.gov/cencode/t32c03.pdf
• N.D.C.C. § 32-03-06 -- "Accepting payment of the whole principal as such waives all claim to interest, unless interest is provided for expressly in the contract." Accessed 2026-07-05: https://ndlegis.gov/cencode/t32c03.pdf
• N.D.C.C. § 32-03-09 -- "No damages can be recovered for a breach of contract if they are not clearly ascertainable in both their nature and origin." Accessed 2026-07-05: https://ndlegis.gov/cencode/t32c03.pdf
• N.D.C.C. § 47-14-05 -- "Interest for any legal indebtedness must be at the rate of six percent per annum unless a different rate not to exceed the rate specified in section 47-14-09 is contracted for in writing." Accessed 2026-07-05: https://ndlegis.gov/cencode/t47c14.pdf
• N.D.C.C. § 32-12.2-02 -- "The liability of the state under this chapter is limited to a total of five hundred thousand dollars per person and two million dollars for any number of claims arising from any single occurrence. The state may not be held liable... for punitive or exemplary damages." Accessed 2026-07-05: https://ndlegis.gov/cencode/t32c12-2.pdf
• N.D.C.C. § 32-12.1-03 -- "The liability of political subdivisions under this chapter is limited to a total of five hundred thousand dollars per person and two million dollars for any number of claims arising from any single occurrence..." Accessed 2026-07-05: https://ndlegis.gov/cencode/t32c12-1.pdf