Patience is Not Always a Virtue With Commercial Litigation Claims

Understanding Statutes of Limitations

I handle a large amount of commercial litigation. When a new client meets with me to discuss a business dispute or a commercial claim he or she wishes to pursue, I of course want to help them and be their advocate as to any viable cause of action they have.

But when a business owner comes in with a legitimate commercial claim, it is always disappointing if I have to inform them that the time to pursue their case has passed and that they are out of luck in terms of legal remedies.

Such moments are a reminder that when a business dispute arises, it is important to be aware of the statute of limitations for bringing such claims, and equally important to meet with an experienced commercial litigation attorney to discuss your claims soon after they arise or shortly after you become aware of them.

When the Clock Starts and Stops

As a preliminary matter, there is no single “statute of limitations” in Connecticut or any other state. Rather, different claims, whether they be for distinct types of commercial cases, personal injury suits, or criminal matters, have their own time periods during which a lawsuit must be filed.

A limitations period starts running when a claim “accrues,” which is generally when the act that forms the basis of the claim occurs, such as when a party commits an act which constitutes a breach of contract or makes a statement that forms the basis of a fraud claim. However, if a defendant fraudulently conceals a cause of action from the plaintiff, the cause of action will not accrue until the plaintiff discovers the existence of the cause of action.

The following is a brief rundown of Connecticut’s statutes of limitations for some of the most common commercial claims:

  • Breach of Contract. The statute of limitations for breach of a written contract is six years, for oral contracts it is three years, and for contracts of sale it is four years. The statute of limitations accrues when the breach occurs, and will still accrue even if the injured party is ignorant of the fact that it has been damaged.
  • Breach of Fiduciary Duty. A fiduciary duty is a legal responsibility to act in the best interest of another person or organization, including a business. For example, a board of directors has a fiduciary duty to act in the best interest of its shareholders. In Connecticut, the statute of limitations for breach of fiduciary duty is three years.
  • The limitations period for a fraud claim in Connecticut is three years, though the limitations period will be tolled (that is, it will stop running and be extended for a period of time) if the fraud is ongoing based on what is called the “continuing course of conduct” doctrine. This doctrine applies in the course of ongoing business relationships where tortious acts can be difficult to identify and still may be remedied, making a fraud claim potentially premature.
  • Tortious Interference With Contract and Unfair Competition. The statute of limitations is three years for these for these business torts.

While patience may be a virtue in many aspects of both business and life, it is definitely a potential vice in the context of commercial litigation claims. That doesn’t necessarily mean running to the courthouse at the first perceived slight, but it definitely should mean meeting with an experienced attorney to understand your options and time limits soon after you realize that you have in fact been slighted.