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What is the limitation period for filing a breach of contract claim in India?

What is the limitation period for filing a breach of contract claim in India?

11-Mar-2023

Breach of Contract

Answer By law4u team

The Limitation Act, 1963 governs the limitation period for filing a breach of contract claim in India. The limitation period specifies the time within which a legal action must be initiated. In India, the limitation period for filing a breach of contract claim is as follows: For a breach of contract that is in writing and registered: The limitation period is three years from the date on which the breach occurred. For a breach of contract that is in writing but not registered: The limitation period is three years from the date on which the breach occurred. For a breach of contract that is not in writing: The limitation period is three years from the date on which the breach occurred. For a breach of contract where the aggrieved party was not aware of the breach: The limitation period is three years from the date on which the aggrieved party became aware of the breach. For a continuing breach of contract: The limitation period is three years from the date on which the breach stopped. It is important to note that the limitation period cannot be extended, except in cases where the delay in filing the claim was due to fraud or mistake. In such cases, the court may allow an extension of the limitation period. However, it is advisable to initiate legal action within the prescribed limitation period to avoid any complications.

Answer By Anik

The limitation period for the same is 3 years.

Answer By Anik

Dear Client, In India the time within which to file a breach of contract suit is as per the Limitation Act of 1963 which in Article 55 reports a period of 3 years from the date of the breach of contract or from the date of the relevant breach in cases of successive or continuous breaches (Section 22). This is true for suits for compensation or damages as mentioned in the Indian Contract Act of 1872 and the limitation period begins to run at the point the cause of action accrues which is usually upon the first incident of non performance or refusal to perform. Key Aspects and Exceptions Calculation: For at first time offenses the clock starts at the time of the breach. In continuous breaches (for example, an on going non payment) a new 3 year period is initiated with each instance of the breach until the issue is resolved. Exceptions Extending the Period: Out of the Ordinary:. Fraud, Mistake, or Concealment (Section 17): From the date of discovery. Acknowledgment of Liability (Section 18): A written notice (for example in emails or balance sheets) begins a new period from that date. Part-Payment (Section 19): Partial payment resets the 3 year clock. Contractual Limits: Parties cannot enter into an agreement to reduce the period (Section 28 of the Contract Act) but extensions are permitted. Consequences of Delay: If after the period the claim is filed it is dismissed, unless there are exceptions which apply. Courts very much enforce this for the sake of timely justice. I hope this answer helps to resolve your queries. If you still have any concerns, please contact our law firm! Thank you!