You should know the timeframe within which you can take legal action in case of a breach of contract dispute. Under the state law, the statute of limitations dictates how long a party has to file a lawsuit for breach of contract. If the statute of limitations expires, the party who suffered damages from the breach is generally barred from seeking legal recourse. 

If you suspect a breach of contract by the other party, you should consult an experienced business lawyer in Pittsburgh as soon as possible to evaluate your legal options. 

Pennsylvania Statute of Limitations on Written Contracts

Under Pennsylvania law, the statute of limitations for a breach of a written contract is four years from the date of the breach as outlined under 42 Pa. C.S. § 5525(a). This means that from the moment one party fails to fulfill their obligations under a written agreement, the clock starts ticking. Notably, the breach of contract claim must be filed within this four-year window, regardless of when the breach is discovered.

Example: If a contractor agrees to complete work on a building by January 1, 2021, but fails to do so, the other party has until January 1, 2025, to file a breach of contract lawsuit in Pennsylvania.

Pennsylvania Statute of Limitations on Oral Contracts

In Pennsylvania, the statute of limitations for an oral contract is four years, the same as for written contracts. However, proving the existence and terms of an oral contract can be more challenging, as it often depends on witness testimony or other circumstantial evidence. This makes it critical to document agreements in writing wherever possible to avoid disputes.

Example: If two parties verbally agree on a business deal on January 1, 2021, and one party breaches the agreement on June 30, 2021, the aggrieved party would have until June 30, 2025 to file a lawsuit based on the four year statute of limitations.

Accrual of the Statute of Limitations

The statute of limitations begins to run from the moment the breach occurs, not when the injured party discovers the breach. This is usually referred to as the "accrual date" of the cause of action. In many cases, the breach is obvious (e.g., failure to deliver goods or services on time), but there are instances where the breach may not be immediately apparent.

Tolling of the Statute of Limitations

In some situations, the statute of limitations can be tolled, or paused, extending the period within which a lawsuit may be filed. Tolling may occur in cases of:

• Fraud: If one party actively conceals the breach, preventing the other party from discovering it, the statute of limitations may be tolled until the fraud is discovered.
• Mental incapacity: If a party to the contract is mentally incapacitated, the statute of limitations may be tolled during the period of incapacity.
• Bankruptcy: If one party files for bankruptcy, the automatic stay provisions of the bankruptcy code may temporarily halt the statute of limitations.

Special Considerations for Business Contracts

In commercial agreements, especially those involving large-scale or long-term business operations, breach of contract disputes can be more complex. Many business contracts include a choice of law or forum selection clauses that determine where and under which jurisdiction a lawsuit must be filed. In these cases, it is essential to understand whether Pennsylvania law applies and how the statute of limitations interacts with other legal jurisdictions.

Businesses should also be aware of contractual clauses that may alter the statute of limitations. Parties may agree to shorten or extend the time for bringing a claim, but courts generally uphold these modifications only if they are clearly stated and reasonable.

Special Considerations for Consumer Contracts

Consumer contracts, such as those for the sale of goods or services, may be subject to specific protections under the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL). While the statute of limitations for breach of contract claims remains at four years, consumers may have additional legal remedies available if they can prove deceptive practices or fraudulent misrepresentation. In such cases, the statute of limitations for a UTPCPL claim is typically six years, offering broader recourse beyond the breach of contract.

Impact of the Uniform Commercial Code (UCC)

In cases involving the sale of goods, the Uniform Commercial Code (UCC) applies in Pennsylvania. Under the UCC, the statute of limitations for breach of contract involving the sale of goods is also four years. However, the parties involved can agree to reduce the limitations period to no less than one year. It is vital to review any contracts related to the sale of goods to ensure compliance with UCC provisions and Pennsylvania law.

Waiver and Modification of the Statute of Limitations

Parties to a contract may attempt to modify or waive the statute of limitations within their agreement. In Pennsylvania, courts may uphold such modifications as long as they are not unreasonable. For example, a contract clause that reduces the statute of limitations to one year may be enforceable, provided that both parties clearly understand and agree to this provision.

If you believe you are involved in a breach of contract dispute in Pennsylvania, let an experienced Pittsburgh business attorney review your contract with reasonable diligence and ensure that your claim is filed within the appropriate statute of limitations.

Steps Our Pittsburgh Business Contract Attorneys at Very Law Will Take if You Suspect a Breach of Contract

Initial Case Assessment

Pittsburgh business contract attorney Ryan D. Very, Esq. at Very Law will begin by thoroughly reviewing the contract and the specific terms that have been violated. We will gather evidence, analyze the breach’s impact on your business, and assess the overall strength of your case.

Negotiations for a Fair Settlement 

Depending on your goals and the facts of your case, attorney Ryan Very and his team may work to resolve the issue through negotiations with the other party on your behalf, aiming to achieve a favorable outcome without going to court. This approach can save time and costs while protecting your business relationships.

Filing a Lawsuit

If negotiations fail, attorney Very will guide you through filing a lawsuit for breach of contract. Our team will prepare the necessary legal documents, file them with the court, and ensure that your case proceeds under Pennsylvania law, while complying with Title 42 Pa. C.S. § 5525(a) regarding the statute of limitations.

Litigation if Necessary

If the case goes to trial, Ryan Very and his team are prepared to represent you strongly in court. We will present compelling evidence and arguments in the Pennsylvania appellate court and seek maximum compensation or remedy for the breach, ensuring your goals are met and your business interests are fully protected.

Pennsylvania Statute of Limitations Breach of Contract: Our Seasoned Business Attorneys are Here to Help

Very Law represents businesses and individuals in cases ranging from contract disputes and real estate personal property to personal injury tort claims and warranty claim matters. For startups, small businesses, as well as large enterprises, we provide skilled legal representation to protect your business interests at every step. To schedule a confidential consultation with Very Law, call us at 412-424-6199 or contact us online.