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Is there a breach of contract statute of limitations?

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The breach of contract statute of limitations sets a limit on the time one party has to sue another party for breach of a legal contract. Breach of contract can include failing to uphold agreed upon terms without legal cause or preventing the other party from performing its end of the contract. The statute of limitations for breach of contract varies greatly, depending on the type contract and what court holds jurisdiction over the case. Breach of contract statutes of limitations can also vary from state to state. Breach of contract cases can potentially end up in civil court, state court or federal court.

Civil court is the most likely destination for cases involving breach of contract. Examples include a business vendor causing financial harm to a client company by not fulfilling a contract or a company failing to pay a client for services the client has provided. Issues such as these are often remedied in small claims court, provided the financial damage does not exceed a certain amount, usually $15,000. The breach of contract statute of limitations usually ranges from two to five years, depending on the nature of the contract.

A company failing to pay a permanent employee his wages or claims between two business parties that exceed the maximum amount allowed in small claims courts are breach of contract issues that would end up being litigated in state court. Again, the breach of contract statute of limitations can vary based on the nature of the contract, whether the contract was oral or written and other factors.

When a person or entity brings a claim against another party in another state the action may take place in federal court. The breach of contract statute of limitations is anywhere from two to six years for breach of an oral contract and three to six years for a written contract. In certain circumstances the breach of contract statute of limitations can be extended.

Because of the wide variation in rules from state to state and one situation to another, your best resource for handling a breach of contract is a good contract lawyer. Make sure you fully understand your rights, whether you are a plaintiff or a defendant.

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