I. Written Contracts
Prior to 2012, Ohio had an extensive statute of limitations for contracts. Plaintiffs could bring suit regarding contracts for up to fifteen years after the alleged breached occurred. Lawmakers and businessmen agreed that the potential exposure to litigation was just too severe to keep the statute of limitation at fifteen years. Now the statute of limitations for written contracts in Ohio is eight years.
b. Effect of the Change
The time period for potential litigation arising from written contracts has shrunk from fifteen to eight years, thus the exposure of businesses in litigation has accordingly reduced. Businesses will also be able to reduce their costs and insurance liability. Additionally, they may only need to retain records for eight years instead of fifteen.
The statute change will have dramatic effects for class actions. While it has obviously decreased the amount of time to file the suit, it also limits the amount of time that potential class action suits have to find other participants, and reduce the amount of time that attorneys have to gather information. Thus, class action suits should become more efficient.
The change also puts Ohio more in line with many other states, specifically ones in the region. Indiana, Michigan, and Tennessee all have a six year statute of limitations for written contracts. Illinois and West Virginia use a ten year statute. While Kentucky still uses the fifteen year statute.
ORC 2305.06 was passed with sections that encompassed claims occurring prior to passing of the bill. All written contract claims, no matter when agreed to, now have a limitation of eight years. At the latest, claims must be brought within eight years of the statute passing (September 28, 2020). So even if you had a claim in 2012 that had fourteen years before the old statute of limitations was to expire, you now only have eight. Therefore, the eight year limitation applies retroactively.
d. Language of ORC 2305.06
“Except as provided in sections 126.301 and 1302.98 of the Revised Code, an action upon a specialty or an agreement, contract, or promise in writing shall be brought within eight years after the cause of action accrued.”
II. Oral Contracts
Pursuant to ORC 2305.07, contracts that are not in writing have a six year statute of limitations.
III. Promissory Notes
Pursuant to ORC 1303.16, promissory notes have a six year statute of limitations.
IV. Contracts for the Sale of Goods
Pursuant to ORC 1302.98, contracts for the sale of goods have a four year statute of limitations.
*Note that an agreement in writing does not necessarily mean that a written contract exists. This can be common with credit card agreements. If you are uncertain as to the type of contract you have entered, you should seek counsel from an attorney.