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A limitation period is the time within which a claim must be brought before a court. If a suit is filed after that period has run out, the court will ordinarily refuse to hear it however strong the underlying claim may be. The rule exists so that disputes are decided while evidence is still available and so that a person is not left indefinitely exposed to a claim.
The period is counted from the date on which the right to sue first arises, not from the date on which the claimant decided to act. For a claim on a written contract, that is usually the date of breach. For recovery of money lent, it is usually the date repayment fell due. Identifying that starting date correctly is often the most important step in assessing a claim.
Certain events can extend the period. A written acknowledgement of liability signed before the period expires starts a fresh period from the date of acknowledgement. A part-payment recorded in writing can have a similar effect. Time during which the claimant was under a legal disability may also be excluded.
Where a suit is filed late, the court may in some circumstances be asked to condone the delay, but that is an exception and requires the delay to be explained day by day. It cannot be assumed.
The practical consequence is simple: a person who believes they may have a claim should establish the date it arose as early as possible, and should keep any correspondence that acknowledges the obligation.