Statute of Limitations

The maximum time period within which legal proceedings must be initiated after an alleged breach.

Statutes of limitations vary by jurisdiction and type of claim. Written contract claims typically have longer limitation periods (4-6 years) than oral agreements (2-3 years). Some contracts attempt to shorten the limitation period, though enforceability varies.

Once the statute of limitations expires, the breaching party can use it as a defense to avoid liability, even if the breach clearly occurred.

Example

A supplier discovers a contract breach but waits 5 years to file suit. In a state with a 4-year statute of limitations for written contracts, the claim is barred.