When someone breaches a contract, it can be frustrating and stressful, but it`s important to understand the legal process that follows. One critical aspect of a breach of contract claim is when the cause of action accrues. So, when does a cause of action accrue for breach of contract? Let`s examine the answer to this question in more detail.
To start, a cause of action for breach of contract accrues when the breach occurs. In other words, the clock starts ticking as soon as the breach happens. However, the specific timing of when a cause of action accrues depends on the terms of the contract.
For example, if the contract specifies a specific date for performance, and that date has passed without performance, the cause of action for breach of contract accrues on that date. On the other hand, if the contract is for ongoing services or deliveries, the cause of action may not accrue until a substantial amount of time has passed without performance.
It`s important to note that a cause of action does not accrue until the plaintiff discovers or reasonably should have discovered that a breach has occurred. This is known as the discovery rule. For example, if the breached contract involved delivering goods that were damaged in transit, the cause of action may not accrue until the plaintiff receives the goods and discovers the damage.
In addition, some contracts may include provisions that require the parties to engage in mediation or arbitration before filing a lawsuit. In these cases, the cause of action for breach of contract may not accrue until the mediation or arbitration process has been completed.
Once a cause of action accrues, the plaintiff has a limited amount of time to file a lawsuit. This time period is known as the statute of limitations. The statute of limitations varies depending on the state and the type of contract involved. In most cases, the statute of limitations for breach of contract is between three and six years.
In conclusion, a cause of action for breach of contract accrues when the breach occurs, but the specific timing depends on the terms of the contract. It`s important to understand the discovery rule, mediation or arbitration requirements, and the statute of limitations to ensure that you protect your legal rights in a breach of contract claim. As with any legal matter, it`s always best to consult with a qualified attorney to guide you through the process.