Contractual Limitations Period

In one sentence

A deadline for filing a lawsuit that the parties themselves agree to in their contract, often shorter than the legal statute of limitations.

Plain English

In addition to (or sometimes instead of) the time limits set by law, parties can negotiate their own deadline for bringing a lawsuit in their contract. This contractual limitations period is a clause that says something like 'any claim must be filed within one year of the problem occurring.' These clauses are common in commercial contracts because they give both parties certainty about how long they're exposed to potential liability. Courts generally enforce these agreed-upon deadlines, though they must be reasonable and not unconscionable.

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Example

A software license agreement includes a clause stating that any claim for bugs or defects must be brought within 90 days of discovery. Even though state law might allow two years, the contract's shorter window controls.

Used in a sentence

“The parties included a contractual limitations period of six months in their supply agreement to ensure disputes would be resolved quickly.”

Related terms

Statute of Limitations

A law setting the maximum time period within which a lawsuit can be filed after an injury or breach occurs.

Contract

A legally binding agreement between two or more parties to do or not do something.

Boilerplate

Standard, pre-written contract language used repeatedly in many agreements without customization.

Boilerplate Clause

Standard, repetitive contract language used in many agreements without customization.

Lapse

An offer that expires because a deadline passes or too much time has gone by.

Remedy

A legal action or payment a court awards to fix a harm or enforce a right after a breach.

Offer

A proposal to enter into a binding agreement on specific terms.

Acceptance

Agreeing to the exact terms of an offer, creating a binding contract.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.