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Breach of Contract Claims: Statute of Limitations

May 24, 2022

A contract is a legally binding agreement that, among other things, outlines each party's rights and responsibilities and how disputes can be resolved if they arise between the involved parties. As a business owner, you likely have signed or formed contracts with, among others, other businesses, employees, and suppliers.

In the state of California, a contract can be written or oral, but it is advisable to enter into written contracts. It is also advisable that you involve an attorney before you sign or agree to a contract. A qualified attorney can, among other things, help you ensure that your rights are protected should a breach of contract happen.

What is Breach of Contract in California?

Sometimes people and companies fail to honor their contractual obligations. If a supplier, for example, fails to honor their contractual obligations without a legal reason, then a breach of contract has occurred. Unfortunately, if a business or someone breaches a contract, it could adversely affect your business.

What Can You Do if a Breach of Contract Occurs?

You generally have two options after a breach of contract occurs. First, you can try resolving matters with the party that breached the contract. Secondly, you can file a lawsuit against the party that failed to honor their contractual obligations. However, regardless of what you do, it is crucial that you retain the services of an experienced breach of contract attorney.

If you choose to file a lawsuit, a breach of contract attorney can help you ensure that you file your case within the set amount of time. In California, you do not have a limited amount of time to file a breach of contract claim.

Statute of Limitations for Breach of Contract Claims in California

Statutes of limitations exist for important reasons, such as to ensure crucial evidence is not lost. Evidence can get lost if you wait too long to initiate legal proceedings.

What is the time limit for filing a breach of contract claim in California? According to Section 337 of the California Code of Civil Procedure, you have four years to file a breach of contract lawsuit if the contract is a written one. On the other hand, according to Section 339 of the California Code of Civil Procedure, you have two years to file a breach of contract lawsuit if the contract is an oral one. Usually, the "clock" starts ticking when you realize a breach of contract has occurred.

However, it is possible to pause/toll the statute of limitations for some time. For instance, if the defendant has left California or is in jail, you may be able to toll the statute of limitations.

Lastly, you should know that if you file a breach of contract lawsuit after the statute of limitations has run out, the court will likely not hear your case. Even if the court hears your case, chances are, your case will be dismissed after the defendant brings a motion to dismiss on the grounds that you filed your lawsuit outside the statute of limitations.

Contact a San Jose Business Contracts Attorney

If an individual or business has breached a contract, you need an experienced attorney. An experienced Silicon Valley contract lawyer at SAC Attorneys LLP can help you. Contact us at (408) 436-0789 to schedule a consultation.

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