Most business claims in California come with an expiration date. File one day after the statute of limitations runs and, if the defense applies and is timely raised, the claim may be dismissed without reaching the merits. Yet the deadlines vary from one year to four depending on the legal theory, and rules about when the clock starts can move the date by years. Here are the limitation periods California businesses most often need, and the doctrines that stretch or shrink them.
The core deadlines at a glance
- Breach of written contract — 4 years (CCP § 337). Covers signed agreements, and generally runs from the date of breach.
- Breach of oral contract — 2 years (CCP § 339). Half the time for the same broken promise, which is one more reason to get agreements in writing.
- Fraud or mistake — 3 years (CCP § 338(d)), running from discovery of the facts constituting the fraud.
- Breach of fiduciary duty — generally 4 years under the catch-all statute (CCP § 343), but 3 years where the gravamen is fraud.
- Injury to property, conversion, trespass — 3 years (CCP § 338).
- Trade secret misappropriation — 3 years from discovery (Civil Code § 3426.6).
- Defamation — 1 year (CCP § 340(c)); trade libel generally has a 2-year period (CCP § 339(1)).
- Unfair competition under Business & Professions Code § 17200 — 4 years (Bus. & Prof. Code § 17208).
- Sale-of-goods contracts — 4 years under Commercial Code § 2725, which the parties can shorten by agreement to as little as one year.
- Open book account — 4 years (CCP §§ 337(2), 337a), often the workhorse theory for unpaid invoices between merchants.
When does the clock actually start?
The default rule is that a claim accrues when the last element occurs — for contracts, at breach; for torts, at injury. But for claims to which it applies, California's delayed discovery rule postpones accrual until the plaintiff discovers, or reasonably should have discovered, the injury and its wrongful cause. It matters most in fraud and fiduciary cases where the wrongdoing was concealed: a partner who cooked the books in 2021 may still face a timely claim in 2026 if the manipulation only surfaced last year. The rule is not a free pass — once you have facts that would make a reasonable person suspicious, the clock starts, whether or not you investigated.
Doctrines that pause or extend the deadline
Several rules can toll (pause) a limitations period:
- Defendant out of state. Time the defendant is absent from California generally does not count (CCP § 351).
- Tolling agreements. Parties negotiating a resolution can sign a written agreement pausing the clock — a common and sensible tool that keeps settlement talks from being rushed by a filing deadline.
- Continuous accrual. For recurring obligations like monthly payments or royalties, each missed installment triggers its own limitations period, so older installments may be barred while recent ones remain live.
- Equitable estoppel. A defendant whose own conduct induced the delay — promising payment to run out the clock, for example — may be barred from asserting the defense.
- Written acknowledgment of a debt. Under CCP § 360, a signed written acknowledgment or new promise to pay can restart the period on a contract debt, and part payment can have a similar effect.
Shorter fuses hiding in your contracts and claims
Statutes are not the only source of deadlines. California courts enforce reasonable contractual provisions shortening limitation periods — construction contracts, insurance policies, and commercial terms frequently cut the window to one year. Claims against public entities generally require presentation of a government claim before suit, within six months for personal injury or property damage claims and within one year for other claims. And insurance policies impose their own notice and suit deadlines independent of the code. When a dispute surfaces, the contract has to be read alongside the statutes before anyone assumes there is time to spare.
What this means in practice
Three habits protect California businesses:
- Date the breach when the dispute starts, not when you sue. Identify the earliest arguable accrual date and calendar the shortest plausible deadline.
- Do not let negotiations run the clock. If talks are productive but slow, propose a tolling agreement. If the other side refuses, that tells you something.
- Papering the file helps both ways. Putting agreements in writing generally doubles your window compared to oral deals, and written acknowledgments can revive aging receivables.
Limitations analysis is also a defense tool: if your business is the one being sued, a missed deadline can end the case at the demurrer stage. Either way, it is one of the first questions our business litigation practice runs on any new dispute, and it frequently shapes strategy in debt collection matters where invoices have aged.
Talk to a California business attorney
If you are weighing a claim — or worried one is coming — a limitations analysis is the place to start, and it costs nothing to have that first conversation. Schedule a free consultation or call (949) 418-2113.
This article is attorney advertising and provides general information only. It is not legal advice and does not create an attorney–client relationship. Facts matter; consult a lawyer about your specific situation.
