Key Topics:  Essential Terms | Oral Versus Written Agreements  | Statute of Limitations  | Breach

Statute of Limitations

In Pennsylvania, the statute of limitations to bring an action for breach of contract is four years for most kinds of contracts, but there  are some exceptions.  See 42 Pa.C.S.A. Judiciary and Judicial Procedure § 5529.  

Exceptions

As of this writing, Pennsylvania continues to have an archaic concept of contract “under seal,” when a party would use wax or another substance to seal a contract and put his unique stamp in the seal.  This would extend the statute of limitations to 20 years.  In modern times, the odd concept of “under seal” still exists, if the words “UNDER SEAL” appear at the signature line on the contract, potentially extending the statute of limitations.  You should talk to a lawyer before signing any contract “under seal” or you might be facing a law suit for breach of contract nearly 20 years after the alleged breach.  See Beneficial Consumer Discount v. Dailey, 644 A.2d 789 (Pa. Super. 1994) (citing Klein v. Reid, 422 A.2d 1143 (Pa. Super. 1980).

Further, the breach of contract may also involve a  violation of Pennsylvania’s unfair trade practices and  consumer protection law, which has a six year statute  of limitations, but when in doubt, you should always  err on the side of filing suit sooner rather than later.

The statute of limitations for an action on the part of a  minor child will be tolled until he is 18 years old,  meaning, the statute does not start to run until he is  18. Likewise, an argument can be made that the  statute should not start running until the aggrieved  party discovers the breach (the discovery rule),  however you should talk to counsel about the current  posture of appellate law on this issue at the time you  seek to make your claim. You should also talk to a lawyer about whether a minor-party to a contract can void the contract due to being a minor.  

But note that the time limitation for filing a claim may be shorter than four years, if for example, the plaintiff’s claim is one for defamation (one year), or fraud (2 years), or theft (2 years), and only six months to make a formal claim on the government, in many instances about which you should talk to a lawyer.

Always File Sooner Rather than Later

By waiting to file suit, you may come to learn that the statute of limitations has run as to most of your claims.

Also note that, for some kinds of claims, the statute of limitations may be extended, by virtue of the “discovery rule” – like if your doctor leaves an instrument in your body following a surgery and you do not discover it until later.  This, however, does not necessarily apply to breach of contract claims.

Fraud on the part of one party — to conceal the breach — may serve as a basis to toll or extend the statute of limitations, but fraud is challenging to prove as it involves a very high burden of proof — clear and convincing evidence, so you should never rely on any of these exceptions to delay filing suit.

You should definitely speak to a lawyer as early as possible and not try to guess which limitation period may apply without getting advice from a licensed attorney who regularly practices contract law.

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