Business Resources

Statute of Limitations Basics

By: AllBusiness.com

Statutes of limitations are laws that set the deadline or maximum period of time within which a lawsuit or claim may be filed. The deadlines vary depending on the circumstances of the case and the type of case or claim. The periods of time also vary from state to state and vary depending on whether they are filed in federal or state court. If a lawsuit or claim is not filed before the statutory deadline, the right to sue or file a lawsuit or claim is barred. Under certain circumstances, a statute of limitations will be extended beyond its deadline.

There are several rationales for having statutes of limitations:

Fairness. Over time, memories fade, evidence is lost or disappears, and people want to get on with their lives without legal interference from the past.

The diminishing value of evidence. After an event takes place, over time, memories fade and important evidence may be lost or disappear. The best time to bring a lawsuit is as close to the event as possible so as to have the best evidence available to prove a lawsuit or claim (and to defend a lawsuit or claim);

Diligence on the part of the injured party (person, entity, or law enforcement agency) in bringing the lawsuit. The injured party should be required to pursue an action diligently with speed and efficiency, both because of the diminishing value of evidence and because of the importance of closure for all parties.

Categories of Statutes of Limitations Statutes of limitations are typically divided into civil and criminal claims and depend on state or federal law:

Civil. The following are the statutes of limitations for civil claims:

  • Negligence: personal injury (1 to 2 years) or intentional wrongdoing (1 to 6 years);
  • Breach of oral contract (2 to 6 years);
  • Breach of written contract (3 to 6 years);
  • Professional malpractice (medical -- 1 to 4 years from act or occurrence of injury, or 6 months to 3 years from discovery, and certain circumstances will extend statute, including if party is a minor, foreign object, or fraud; legal -- 1 to 3 years from date of discovery, or a maximum of 2 to 5 years from the date of the wrongful act);
  • Fraud or mistake (3 to 6 years, time commencing on date of discovery of fraud or mistake, not the occurrence);
  • Misrepresentation and fraud (3 to 6 years);
  • A claim against a government entity (usually less than 1 year);
  • Federal income taxes (10 year limit on collection of federal taxes)
  • State income taxes (varies from state-to-state; some states have no limit on this); and
  • Enforcement of civil judgment (5 to 25 years).

A chart listing the statutes of limitations for some of the most common causes of action (written and oral contract, personal injury, and property damage) is available at Nolo.com.

Criminal. There is generally no time limitation for bringing a prosecution for homicide.

Limitations on the time for a criminal prosecutor to bring a criminal action against a person who has broken the law is based on the following:

  • Whether the action is in federal or state court;
  • The type of punishment recommended for the type of crime; and
  • Whether the death penalty is part of the recommended punishment.

Tolling
There are certain circumstances under which a statute of limitations is tolled, meaning the statute can be extended under certain limited instances, such as:

  • A delay in the discovery of the injury or harm for which a lawsuit would be filed;
  • A delay in the discovery of the injury or harm as a result of reasonable reliance on a person in a trusted position; and
  • If the injured person is a minor (under 18 years of age), the minor's right to bring a personal injury action (negligence) is tolled until the minor reaches the age of majority.

    Violation of Statutes of Limitation
    If you are a defendant and believe that a lawsuit or claim has been filed against you that violates the statute of limitations, it is up to you to have the case dismissed. It is rare that a judge will throw out a case on his or her own.

    One of the first things that you should do if you are sued, is to check the applicable federal or state statute of limitations to determine whether the lawsuit or claim has been filed in a timely manner. If the statute of limitations has expired and the lawsuit has been filed in an untimely manner, it is up to you to alert the court to this fact. Once you have determined the expiration of the statue of limitations, you ultimately be able to go to court and have the lawsuit dismissed.

    For more information, go to the Litigation section of the Legal Center at AllBusiness.com.

  • AllBusiness.com operates one of the Web's premier business sites, providing practical information and services for business professionals and growing businesses. See more at www.allbusiness.com.

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