Key Takeaways

  • Delaware’s standard statute of limitations for written contracts is three years, but certain contracts can extend this up to 20 years.
  • Section 8106(c) of Delaware law allows parties to contractually agree to longer limitation periods, including those tied to external events or documents.
  • Contracts over $100,000 governed by Delaware law may set claims periods up to 20 years through clear language.
  • The Delaware Court of Chancery has upheld retroactive application of the 20-year period for qualifying contracts.
  • Ambiguity in contract language can lead to courts applying the default three-year limit, even in high-value agreements.

Delaware breach of contract statute of limitations is the amount of time a wronged party has to sue for damages accrued when a contract is breached. Each state independently establishes statutes of limitations for civil and criminal lawsuits in order to prevent frivolous suits and preserve evidence and testimony.

Importance of Statute of Limitations

If you're considering a civil or criminal lawsuit, it's important to understand the statute of limitations that applies in your case. This depends on factors that include:

  • Whether the individual is an individual or business entity
  • What is the cause of action for a personal injury case?
  • Is it a criminal or civil case?
  • When did the loss or injury in question occur?
  • Where will the lawsuit be filed?

Shorter statutes of limitations apply if you are suing a government agency, state, or municipality. These suits also require that you fulfill specific notice requirements. Medical malpractice, product liability, and personal injury cases each have a separate limitation and also require notice or certificate.

If you do not file your suit before the statute of limitations expires, you may not be able to receive compensation for the damages you suffered. The clock begins ticking upon initial discovery of the problem.

Criminal Statute of Limitations

  • Felony offenses in Delaware typically carry a five-year statute of limitations, with the exception of charges for murder and most sexual offenses.
  • The statute of limitations for Class A misdemeanor charges is three years. These crimes include unlawful sexual contact, unauthorized computer access, terroristic threats, and/or reckless burning or exploding.
  • Two-year statute of limitations exists for Class B and C misdemeanors.
  • Misdemeanors involving a breach of fiduciary duty or fraud carry a three-year statute of limitations.

Civil Statute of Limitations

  • Personal injury cases have a statute of limitations of two years, including medical malpractice, personal property damage, product liability, slander, and libel.
  • A three-year limitation applies for breach of written contracts and two years for breach of spoken contracts.
  • Debt collection suits have a three-year statute of limitations.

Tolling of Statute of Limitations

In some cases, the statute of limitations is tolled, or suspended for a specific period of time. In Delaware, this includes cases in which:

  • The person was a minor or mentally incapacitated when the injury occurred
  • Bankruptcy was filed by the defendant
  • Medical malpractice affects a child under the age of six; the limit is suspended for two years or until he or she turns six
  • The accused in a criminal case is a fugitive of justice

Statute of Limitations Extension for Contract Claims

Legislation passed in Delaware in 2014 extends the statute of limitation for breach of contract for 20 years. No state currently has a longer limitation period for contract breach claims. This applies to contracts of at least $100,000. These contracts may specify limitations that include:

  • A time period not to exceed 20 years
  • An indefinite time period of up to 20 years
  • A period of time associated with another action, event, agreement, document, or statutory period within 20 years

This change is also important for the many companies that are incorporated in Delaware and located elsewhere.

Contract Language for Extending the Claims Period

Providing a specific date for the claims period to end offers the most clarity with this type of contract. In Delaware, using "indefinitely" indicates that you want the claims period to extend as long as possible. Applicable statute of limitations indicates three years based on prior case law. Adding a parenthetical phrase indicates that you extend claims for longer than three years.

Contract Drafting Considerations Under Section 8106(c)

When drafting contracts governed by Delaware law, parties seeking to extend the statute of limitations beyond the default three years should explicitly reference 6 Del. C. § 8106(c). This section authorizes agreements to define a “period specified” for bringing claims, not to exceed 20 years from accrual. Importantly, the contract must:

  • Clearly state the intention to extend the claims period.
  • Define the duration using fixed time (e.g., 10 years), an external reference (e.g., until final payment under the agreement), or an indefinite period not exceeding 20 years.
  • Include unambiguous language, as vague terms like “indefinitely” without reference to the statutory max can be construed as insufficient.

Ambiguities in drafting may result in Delaware courts applying the default three-year limitation even in sophisticated, high-value contracts.

Delaware Court of Chancery Ruling

The Delaware Court of Chancery ruled on the ability to contract around statute of limitations in the 2006 suit Bear Stearns Mortgage Funding Trust vs. EMC Mortgage LLC et al. They interpreted Section 8106(c) to provide flexibility when the language "period specified" is used.

This is not meant to be a change in substantive law, but rather a procedural matter designed to impact remedies. Retroactivity may also apply provided that this provision does not cause injustice. Agreements that do not indicate a statute of limitations are subject to the statutory maximum of 20 years.

Retroactive Application of the 20-Year Limitation

The Delaware Court of Chancery has affirmed that the 2014 amendment to Section 8106(c), allowing up to a 20-year statute of limitations for breach of contract, applies retroactively to contracts executed before the statute's enactment—provided they meet the statutory criteria. This means that parties to older contracts may benefit from the extended period if the language within the agreement supports such an extension.

In Bear Stearns Mortgage Funding Trust v. EMC Mortgage LLC, the court emphasized that this extension is procedural, not substantive, and does not alter underlying rights but instead affects the remedy timeline. This distinction allowed for broader application of the statute’s provisions and encouraged parties to review legacy contracts for compliance.

Frequently Asked Questions

1. What is the default statute of limitations for breach of contract in Delaware? Three years for written contracts, unless extended under Section 8106(c).

2. Can Delaware contracts extend the limitations period beyond three years? Yes. If the contract is valued at $100,000 or more and governed by Delaware law, it may specify a period up to 20 years.

3. Does the 20-year limitation apply retroactively? Yes. Delaware courts have held that the extension may apply retroactively if contract language supports it.

4. What if a contract says claims can be brought "indefinitely"? Without clear reference to the 20-year maximum, Delaware courts may limit claims to the default three-year period.

5. How can I make sure my contract benefits from the extended limitations period? Use explicit language referencing Section 8106(c) and specify a defined period or event-based timeline within the 20-year maximum.

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