Statute of Limitations Oral Contract
The statute of limitations oral contract is the length of time in which a person can bring a lawsuit against another party for a breach of oral contract.3 min read
The statute of limitations oral contract is the length of time in which a person can bring a lawsuit against another party for a breach of oral contract. Keep in mind that an oral contract is not the same as a written contract. While a written contract is an agreement that is made in writing between two parties, an oral contract is a verbal agreement. Written contracts are always legally binding, so long as all of the elements of a contract are met and no other illegalities or unconscionability claims have arisen. Oral contracts, however, aren’t always legally binding. It is generally binding if one party proves the tangible evidence of the spoken agreement along with reliance on the performance of the other party.
Statute of Limitations: An Overview
Every state has its own unique laws with regard to the statute of limitations on legal suits. The statute of limitations is a law that provides specific information as to how long one can wait before bringing a lawsuit against another party. This law is in effect for many reasons, including the following:
- To prevent delayed lawsuits, i.e., legal suits being brought several years after an issue has arisen, i.e., breach of contract
- To put an end date to litigation; otherwise, legal suits would be brought at any time for any reason or another
- To prevent stale witnesses, as waiting longer will reduce the likelihood of a witness remembering the incident
- To prevent stale records, since records are generally destroyed after a certain period of time, i.e., a business might be required to keep records for a period of 5 years
After the statute of limitations has expired, the claim can’t be brought in court, even if a court would have previously found the oral contract to be enforceable.
Statute of Limitations for a Breach of Contract
Most states provide a statute of limitations anywhere between 3 to 15 years for a breach of contract. Be mindful that written contracts generally have a longer statute of limitations period, whereas oral contracts will have much shorter limitation periods. A common question would be when the statute of limitations begins to run; the answer to this is that the period will begin to run when the circumstances and facts regarding the case have reached a level in which a legal action could arise, i.e., breach. Therefore, it doesn’t matter when the breach was discovered, as the period will begin running when someone either knew or should have known that an action could be brought.
If you have an oral contract dispute that you want to bring in court, it would be a good idea to speak to an attorney who can assist in the claim and provide additional information regarding the statute of limitations. Some states have different limitations depending on the type of oral contract. There are usually separate laws for recovering on debt, mortgage breaches, or other similar types of oral contract legal disputes.
Statute of Frauds
The doctrine of the statute of frauds is distinct from the statute of limitations, as it requires that certain types of contracts be in writing in order to be legally enforceable.
The statute of frauds is simply a remedy that the court can offer as opposed to determining the actual validity of a contract. Therefore, this doctrine will not state whether or not the contract is in fact valid by meeting all of the necessary contractual elements. Rather, it will be used in court as an affirmative defense to a lawsuit that seeks enforcement of the oral contract by indicating that the contract isn’t enforceable since it should be in writing based on the statute of frauds.
Specifically, certain state laws require that some contracts be in writing in order for the state to legally recognize it. For example, most states provide that for the sale of land, the contract must be in writing. However, oral leases that exist for a period of one year or less can be oral. The statute of frauds also states that an oral agreement that is entered into subsequent to the written agreement can cancel out the prior written contract.
If you need help learning more about the statute of limitations on an oral contract, or if you want to find out if your oral contract is enforceable, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law, and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.