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Statute of Limitations: If You Let it Run Out, You Will Lose Your Day in Court

April 22, 2013

Posted in Litigation Strategies

OLYMPUS DIGITAL CAMERASimply put, a statute of limitations is a deadline for filing a lawsuit. Depending on the types of cases, most lawsuits have to be filed within a certain amount of time such as:

  • Personal injury: 2 years after the injury if it is discovered right away; otherwise, 1 year after the discovery of the injury.
  • Breach of written contract: 4 years after the date of the breach.
  • Breach of oral contract: 2 years after the date of the broken promises.
  • Fraud: 3 years after the wrongful act.
  • Property damage: 3 years after the damage of the property.
  • Professional negligence: 1 year after the incident.

If you don’t file your lawsuits within the period, you will lose your day in court, and the remedies available to you will no longer available. Thus, it is vital for you to know your claim and when you need to file the lawsuit by. Often, the lawsuit has to be filed just to preserve the statute of limitations.

When is a statute of limitations tolled (suspended)?

Sometimes, the period for you to file lawsuit will be temporary suspended. The most common situation is by an agreement between the parties. There are times when parties feel like they can resolve the dispute without filing a lawsuit, and in those circumstances it makes sense for an agreement to have extra time for the parties to work out a solution.

Tolling of a statute of limitations may also happen when the defendant is a minor, is out of state, is insane, or is on active military service. The law of statute of limitations dealing with these circumstances is fairly complicated and is narrowly applied. Thus, you should discuss these issues with your attorney, and make sure that the limitation will in fact toll and your right to file the lawsuit is preserved.

What is the reason for imposing a statute of limitations?

There are several reasons that the law imposes such limitations to file lawsuits, and the most important reason is to protect the defendants. In the eyes of the law, if the plaintiffs have good causes of action, they will most likely file lawsuits within a reasonable period of time. It is an assumption, but it does make sense. Let’s say that you have an agreement with your business partner to engage in a certain business venture, but you realize that your business partner is not doing what he or she agreed to: You will most likely engage in discussion with your partner in an attempt to resolve the issue. If no resolution can be reach, and doing business together no longer makes sense, the lawsuit will most likely be filed soon afterwards, and not four years after your realization of the breach occurred.

The second purpose of imposing such limitations is that a defendant might have lost the evidence to disprove the claim asserted by the plaintiff, and if the plaintiff is allowed to bring suit after such long period of time, it is not fair to the defendant if he/she cannot investigate and compile necessary evidence to defend him/herself. After all, memory fades as time goes on, and we tend to keep our emails or other forms of communication only for a certain period: Banks, for example, are only required to keep records for the last 7 years, and the your Certified Public Accountant who does your company books and records and files tax returns is only obligated to keep the documents for a limited time as well.

The application of the statute of limitations may seem simple, and most of the time it is. However, there are certain circumstances when the law is narrowly applied, and at other times, when the facts are unique, there are really no clear-cut answers without doing careful research.

If you ever have any questions concerning when you should file your lawsuits, or whether the statute of limitations for your claim has run out, consult with an experienced business trial attorney. Call us today at (714) 415‑2007 to schedule an appointment, or contact us online via our secure contact request form.