Statute of Limitations for Contract Disputes.
New York Law in Plain English.

Six years under CPLR 213(2) for most breach of contract claims. Four years under UCC 2-725 for the sale of goods. The clock runs from the date of breach, not the date of discovery. A practitioner’s walk through the limitations periods, accrual rules, contractual shortening, and tolling. 28 years in New York Supreme Court. The Lawyer’s Lawyer.

The Two Periods That Govern Almost Every Case

The first question on any contract claim is whether the limitations period has run. Two statutes do most of the work in New York.

CPLR 213(2): six years. The default limitations period for contracts express or implied, except as provided by other statutes. This is the rule for services contracts, employment agreements, separation agreements, license agreements, settlement agreements, indemnification agreements, and most commercial contracts that are not for the sale of goods.
UCC 2-725: four years. The limitations period for an action for breach of any contract for sale of goods. UCC 2-725(1). The parties may by original agreement reduce the period to not less than one year, but may not extend it. UCC 2-725(1).

Several other limitations periods apply on the margins. CPLR 213(8) governs fraud actions (six years from the wrong, or two years from discovery, whichever is longer). CPLR 214(5) governs personal injury actions, including negligence, at three years. CPLR 214(4) is the three-year period for an injury to property. Where a contract claim sounds in fraud, mixed pleading raises difficult limitations issues that go to the gravamen of the cause of action. Carlson v. American International Group, Inc., 30 N.Y.3d 288 (2017).

For the four element pleading framework these limitations apply to, see our guide to the elements of a breach of contract claim in New York.

When the Clock Starts: Accrual on Breach, Not Discovery

The most important rule, and the one most frequently misunderstood: a breach of contract action accrues at the time of the breach, not at the time the plaintiff discovers the breach. Ely-Cruikshank Co. v. Bank of Montreal, 81 N.Y.2d 399 (1993). The Court of Appeals reaffirmed this in Hahn Automotive Warehouse, Inc. v. American Zurich Insurance Co., 18 N.Y.3d 765 (2012). Discovery rules apply to fraud claims (CPLR 213(8)) and to certain professional malpractice contexts (CPLR 214-a, medical malpractice). They do not apply to ordinary contract claims.

Consequence: a claim that the plaintiff did not learn about until year five may already be time barred at year seven, even though the plaintiff acted promptly after learning of the breach. This trap recurs in long term commercial relationships, where a counterparty’s defective performance is not noticed until long after the event.

The accrual rule shapes the demand letter, the complaint, and the motion practice. A complaint that pleads breaches occurring more than six years (or four years for goods) before filing is vulnerable to a CPLR 3211(a)(5) motion to dismiss on limitations grounds. The plaintiff who knows there are old breaches alongside fresh ones must consider whether to plead the older breaches as part of a continuing course of conduct or to drop them.

UCC 2-725: The Four Year Rule for Goods

UCC 2-725 applies to any contract for the sale of goods. UCC 2-105(1) defines goods broadly to include all things movable at the time of identification to the contract. The four year period applies regardless of whether the buyer or seller sues, regardless of whether the breach is of warranty or of an express performance term, and regardless of when the buyer discovers the defect.

UCC 2-725 has its own accrual rule. Subsection (2) provides that a cause of action accrues when the breach occurs, regardless of the aggrieved party’s lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except where the warranty explicitly extends to future performance and discovery of the breach must await the time of such performance, in which case the cause of action accrues when the breach is or should have been discovered.

Two practical points about UCC 2-725:

The future performance exception is narrow. A warranty that goods will perform for a specified period (e.g., a five year roof warranty) ordinarily qualifies. A general warranty that goods will be merchantable does not. Heller v. U.S. Suzuki Motor Corp., 64 N.Y.2d 407 (1985).
Mixed contracts: predominant purpose test. Where a contract involves both goods and services, the four year rule applies only if the predominant purpose is the sale of goods. The cases turn on whether the goods or the services dominate the agreement.

Accrual Variations: Installment, Continuing, and Demand Contracts

The default rule (accrual on breach) is uncomplicated. Several common contract structures alter how the rule applies.

Installment Contracts

Each missed installment is a separate breach with its own accrual date. Bulova Watch Co. v. Celotex Corp., 46 N.Y.2d 606 (1979). A loan agreement requiring monthly payments accrues separately on each missed payment. The plaintiff can recover all installments missed within the limitations period and is barred only as to installments that fell due more than six (or four) years before suit.

An acceleration clause changes the analysis. If the plaintiff invokes the acceleration clause, the entire balance becomes due, and the limitations period for the entire balance runs from the acceleration date. If the plaintiff does not accelerate, the installment by installment rule applies. The election to accelerate must be clear; ambiguous letters are not acceleration.

Continuing Contracts

A breach of a contract calling for continuous performance (an ongoing services agreement, a long term supply agreement) gives rise to a fresh cause of action with each new breach. The plaintiff can recover for each separate breach committed within the limitations period, even if older breaches are time barred.

Guaranties

A guaranty accrues on the date the principal obligation is breached and demand is made on the guarantor (or would have been futile). A guaranty of payment is suable on default of the principal; a guaranty of collection requires that the creditor first exhaust remedies against the principal.

Demand Obligations

A note or contract payable on demand accrues on the date of execution unless the instrument specifies otherwise. UCC 3-122. The creditor cannot extend the limitations period indefinitely by withholding demand.

Indemnification Agreements

An action for indemnification of a defense cost or judgment accrues when the indemnitee makes payment, not when the underlying loss is incurred. McDermott v. City of New York, 50 N.Y.2d 211 (1980). This is a meaningful protection where indemnification rights would otherwise be lost while underlying litigation drags on.

Contractual Shortening: How Far Parties Can Cut the Period

New York permits the parties to agree in writing to a limitations period shorter than the statutory default, provided the agreed period is reasonable and the agreement is in writing under CPLR 201. The seminal case is John J. Kassner & Co. v. City of New York, 46 N.Y.2d 544 (1979), which held that an agreement modifying the statute of limitations by specifying a shorter but reasonable period is enforceable, while an agreement made at the inception of liability that would extend the statutory period is not. The clause in Kassner was a six-month provision, and the Court reversed and dismissed the claim as time barred.

Specific guidance from New York case law:

Two year shortenings are routinely enforced in commercial contexts. So are three year shortenings.
One year shortenings have been enforced in employment, insurance, and certain commercial settings, but they invite reasonableness challenges.
Less than one year is dangerous territory. UCC 2-725(1) caps shortening at one year for goods contracts. For non goods contracts, very short periods (90 days, 180 days) have been struck on reasonableness grounds in consumer or unequal bargaining contexts.
The shortening provision must be specific. A general clause stating that “all claims must be brought within X period” can satisfy this. A buried clause in fine print without conspicuous notice is at risk on procedural unconscionability grounds.

For the plaintiff, this means: read the contract before drafting the demand. A 12 month or 24 month limitations clause can convert a viable claim into a lost one. For the defendant, this means: if a shortening clause exists and the suit was filed outside it, raise the limitations defense at the pleading stage under CPLR 3211(a)(5).

Tolling: The Narrow Routes to Stop the Clock

Tolling is the exception, not the rule. Each tolling doctrine is narrow and must be pleaded and proved factually. The vehicles that matter in commercial cases:

GOL 17-101: Written Acknowledgment

A written acknowledgment of the debt or obligation, signed by the party to be charged, restarts the limitations period. The acknowledgment must (a) be in writing, (b) be signed, (c) clearly recognize the existence of the debt, and (d) imply a promise to pay. Bare reference to a balance, without recognition that the obligation is owed, is not enough. Lew Morris Demolition Co. v. Board of Education, 40 N.Y.2d 516 (1976). A part payment can also trigger acknowledgment under common law principles, but only if accompanied by circumstances that imply a promise to pay the remainder.

CPLR 207: Defendant’s Absence from the State

The limitations period is tolled while the defendant is outside New York and is not subject to long arm jurisdiction. The toll has narrowed dramatically since CPLR 302 expanded long arm jurisdiction. In practice, CPLR 207 tolls little for a defendant who can be served outside the state under CPLR 313.

Fraudulent Concealment

The doctrine of equitable estoppel can preclude a defendant from asserting limitations where the defendant’s own affirmative misrepresentations or concealment caused the plaintiff to delay suit. The plaintiff must show (a) the defendant’s wrongful concealment, (b) reasonable reliance by the plaintiff, and (c) due diligence after discovery. Zumpano v. Quinn, 6 N.Y.3d 666 (2006). Mere silence, without a fiduciary duty to disclose, does not support equitable estoppel.

CPLR 205(a): Six Month Re Filing After Termination

Not technically tolling, but functionally critical: where an action is timely commenced and is later terminated in any manner other than by voluntary discontinuance, failure to obtain personal jurisdiction over the defendant, dismissal for neglect to prosecute, or a final judgment on the merits, the plaintiff has six months to refile even if the underlying limitations period has expired in the interim. Those four terminations are the statute's exclusions, not its triggers, and reading them the other way is the most common mistake made with this section. The provision saves cases that would otherwise die from procedural mishaps.

What does not toll: settlement negotiations, ongoing performance attempts, internal investigations, and the plaintiff’s own indecision. The clock keeps running.

Strategic Considerations

Three observations from daily commercial practice:

Timeliness analysis is the first item on a case evaluation. Before any merits work, identify the claim, the relevant statute (CPLR 213(2), UCC 2-725, or another), the date of breach, the date of suit (or projected date of suit), and any contractual shortening provision. If the claim is close to the line, that drives intake decisions, demand letter timing, and choice of forum.

Older breaches drag down newer ones. A complaint that pleads ten missed payments stretching over seven years invites a partial dismissal of the older payments and complicates the case. Pleading only the timely missed payments yields a cleaner, faster path through 3211 practice.

Defendants who think they have a limitations defense should plead it. CPLR 3018(b) requires affirmative defenses to be pleaded in the answer. CPLR 3211(a)(5) authorizes a pre answer motion to dismiss on limitations grounds. Failing to plead the defense in the answer waives it.

For the four element pleading framework these limitations apply to, see The Elements of a Breach of Contract Claim in New York. For the broader treatment of contract law, see What Constitutes Breach of Contract in New York.

Talk to a Breach of Contract Lawyer in New York

The Law Office of Frederic R. Abramson represents plaintiffs and defendants in breach of contract disputes in New York Supreme Court across the five boroughs, Nassau, Suffolk, Westchester, and Orange counties. Limitations analysis at intake, contractual shortening review, demand letters, complaints, motions to dismiss under CPLR 3211(a)(5), and resolution. 28 years of daily courtroom experience. The Lawyer’s Lawyer.

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Frequently Asked Questions

What is the statute of limitations for breach of contract in New York?

Six years under CPLR 213(2) for most contracts. Four years under UCC 2-725 for contracts for the sale of goods. The clock runs from the date of breach, not the date of discovery. Ely-Cruikshank Co. v. Bank of Montreal, 81 N.Y.2d 399 (1993); Hahn Automotive Warehouse, Inc. v. American Zurich Insurance Co., 18 N.Y.3d 765 (2012).

When does the limitations period start running on a breach of contract claim?

On the date of breach, not on the date the plaintiff learns of the breach. New York does not apply a discovery rule to ordinary contract claims. A plaintiff who learns of a breach in year five may already be time barred if the breach itself occurred more than six years before suit. The accrual on breach rule is the most important and most frequently misunderstood limitations rule in New York contract law.

Can parties shorten the statute of limitations by contract?

Yes, in writing, subject to two requirements: the agreed period must be reasonable, and the agreement to shorten must be conspicuous. John J. Kassner & Co. v. City of New York, 46 N.Y.2d 544 (1979). UCC 2-725(1) caps shortening at one year for goods contracts. For non goods contracts, two and three year shortenings are routinely enforced; one year shortenings have been enforced but invite reasonableness challenges; periods shorter than one year are at risk under reasonableness or unconscionability review.

How does the limitations period work for installment contracts?

Each missed installment is a separate breach with its own accrual date. Bulova Watch Co. v. Celotex Corp., 46 N.Y.2d 606 (1979). The plaintiff can recover all installments missed within the limitations period and is barred only as to installments that fell due more than six (or four) years before suit. An acceleration clause changes the analysis: if the plaintiff invokes the clause, the entire balance becomes due and the limitations period for the entire balance runs from the acceleration date.

What tolls the statute of limitations on a contract claim in New York?

Few things, narrowly construed. A written acknowledgment under General Obligations Law 17-101 restarts the limitations period. CPLR 207 tolls during the defendant's absence from the state, but that toll has narrowed substantially since CPLR 302 expanded long arm jurisdiction. Equitable estoppel can preclude a defendant from asserting limitations where the defendant's wrongful concealment caused the plaintiff to delay suit (Zumpano v. Quinn, 6 N.Y.3d 666 (2006)). CPLR 205(a) gives the plaintiff six months to refile after a non merits termination of a timely action. Settlement negotiations and ongoing performance attempts do not toll.

When does the statute of limitations run on an indemnification claim?

On the date the indemnitee makes payment, not on the date of the underlying loss. McDermott v. City of New York, 50 N.Y.2d 211 (1980). This protects indemnification rights that would otherwise be lost while underlying litigation drags on. Practitioners routinely overlook this distinction in pleading.

Statute of Limitations for Contract Disputes.New York Law in Plain English.