The single most common way a strong breach of contract claim is lost has nothing to do with the merits — it is the limitation period. Here is exactly how long you have to sue in Ontario, when the clock starts, and the narrow situations where it pauses or resets.
By Jonathan Kleiman, Barrister & Solicitor · Published June 2026
Of all the ways a good claim can fail, the most avoidable is running out of time. Ontario sets a firm deadline to start almost every civil lawsuit, and once it passes, the strength of your case stops mattering. This guide explains the limitation period for a breach of contract in Ontario — the two-year rule, when the clock actually starts, the 15-year backstop, and the handful of situations that change the math. (For what a breach actually is, start with our companion guide: what is a breach of contract in Ontario.)
Under the basic rule in section 4 of the Limitations Act, 2002, you have two years to start a proceeding — counted from the day the claim was discovered. For a breach of contract, that usually means two years from the breach itself. Sue within that window and your claim is timely; start it even a day late and the other side can have it thrown out.
That two-year period is general. A small number of claim types have their own, often much shorter, deadlines — more on those below. But for an ordinary contract dispute, two years is the number to plan around.
This is where most people go wrong. The clock does not always start on the day the contract was signed, or even the day the other party first slipped up. It starts on the day the claim was discovered, and the Act spells out exactly what "discovered" means.
Under section 5, a claim is discovered on the earlier of two dates: the day you actually knew the key facts, and the day a reasonable person in your position first ought to have known them. The "key facts" are four things:
All four have to line up before the clock starts. In a straightforward non-payment case, that is usually the moment payment was due and not made. In a defective-work case, it may be later — for example, when a hidden defect first became apparent.
There is an important catch built into section 5. The Act presumes you discovered the claim on the very day the act or omission took place, unless you can prove otherwise. In other words, the starting point is the date of the breach, and the burden is on you to show the clock should have started later.
The practical consequence is simple and unforgiving: discoverability can only push a deadline later, never earlier — and you only get the benefit of a later start date if you can actually prove you could not reasonably have known sooner. Do not assume you have extra time. Assume the clock started at the breach unless a lawyer tells you otherwise.
Two situations deserve a flag because they trip people up:
Sitting behind the two-year rule is a hard backstop. Under section 15, no claim can be started more than 15 years after the day the act or omission took place — regardless of when it was discovered. So even a loss you genuinely could not have known about for years is cut off at 15 years from the underlying event. In the vast majority of contract disputes the two-year rule bites long before this one ever matters.
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A few specific rules can stop the two-year clock, push back its start, or even restart it. These are exceptions, not the norm — but they matter enormously in the cases where they apply.
If the person who owes you a defined sum of money acknowledges the debt in writing and signs that acknowledgment before the limitation period has expired, the two-year clock restarts from the date of the acknowledgment. A part payment of the debt has the same effect. Even an email or text can qualify in the right circumstances. This is one reason it is worth getting a defaulting party to confirm what they owe — a signed "I'll pay you the $12,000 by March" can buy you two more years.
The clock does not run while the person with the claim is under 18 and not represented by a litigation guardian, or while they are incapable of starting a proceeding because of a physical, mental, or psychological condition and are unrepresented. The real deadline in these cases can be much later than the face-value date — but the rules around guardians are technical, so get advice.
If, after the dispute arises, both sides agree to have an independent third party help resolve it — through mediation or arbitration — the limitation period stops running from the date of that agreement until the process ends. The clock does not vanish; it simply pauses.
In narrow cases, the courts have held that a claim was not "discovered" while the claimant was reasonably relying on the other party's good-faith efforts to remedy the problem, because a lawsuit was not yet an appropriate means. This is a genuine principle, but it is the exception — courts apply it cautiously, and you should never count on it to excuse delay.
Sometimes — and not always in your favour. The Limitations Act lets parties vary the limitation period by agreement, but the rules differ depending on who is involved. In a business agreement (no consumer on either side), the parties can agree to suspend, extend, vary, exclude — or even shorten — the limitation period. That means a clause buried in a commercial contract could give you far less than two years to sue. Whenever a contract is involved, read the limitation and notice clauses before you assume you have the full two years. A contract dispute lawyer can tell you what the agreement actually does to your deadline.
If you start a claim after the limitation period has run, the claim is statute-barred. The defendant pleads the Limitations Act, and the court dismisses the case — full stop. It does not matter that the contract was clearly breached or that you are obviously owed the money. The limitation defence is one of the most powerful tools a defendant has, and once the deadline passes there is rarely any way back. That is why the safest move is always to act well before you think you have to.
The two-year rule is the default, but several claim types run on a different clock. A few examples worth knowing:
Because the deadline depends so heavily on the type of claim and the facts, the smartest first step is to run your dates through our free Ontario limitation period calculator. It gives you a presumptive deadline and flags the situations where you should not rely on a simple two-year count.
A few practical habits keep the limitation period from becoming your problem:
Abstract rules are easier to grasp with a concrete case. Say a supplier agrees to deliver custom parts by March 1, takes your deposit, and the deadline comes and goes with nothing delivered. On March 1, you know three of the four discovery elements at once: you have a loss (no parts, deposit gone), it was caused by an act or omission, and it was the supplier's. The fourth — that a proceeding is an appropriate response — is usually obvious too. So the clock starts March 1, and you generally have until March 1 two years later to sue.
Now change one fact. Suppose the parts were delivered, looked fine, and only failed months later because of a hidden manufacturing defect you could not reasonably have spotted on delivery. Here, discoverability may push the start date to the day the defect became apparent — because that is when you first knew, or ought to have known, that you had suffered a loss caused by the supplier. The lesson is that the start date tracks knowledge, not the calendar of the contract, and the harder it was to know, the more a later start date is arguable. But remember the presumption: the burden is on you to prove the later date, so keep the evidence that shows when you actually discovered the problem.
Sometimes both sides want to keep negotiating without forcing the claimant to issue a claim just to protect the deadline. The Limitations Act allows for this. A limitation period can be suspended or extended by agreement made on or after October 19, 2006. In practice this is done through a tolling (or standstill) agreement — a short written contract in which the parties agree to stop the clock while they try to resolve things, so that time spent negotiating does not count against the claimant.
Tolling agreements are a useful tool, but they have to be done properly and in writing, and the precise wording matters — an ambiguous standstill can create more disputes than it solves. If a deadline is approaching and the other side is asking for "a bit more time to work it out," that is the moment to get a lawyer to paper a proper tolling agreement rather than relying on goodwill. A contract dispute lawyer can prepare one quickly.
Almost every statute-barred claim traces back to one of a handful of avoidable errors:
The fix for all of them is the same: treat the deadline as real and earlier than you think, and get advice well before it closes. If you have a strong breach of contract claim, the worst possible outcome is losing it to the calendar — and it is entirely preventable.
The limitation period is not only the plaintiff's problem. If you have been served with a claim and you have your own claim back against the plaintiff — a counterclaim — that claim has its own limitation period, generally the same two years from when you discovered it. Do not assume that because you were sued, your own claim is automatically preserved; it can expire on its own timeline.
A related rule covers contribution and indemnity — where you have been sued and want to bring in someone else who shares the blame. For those claims, the two-year clock generally runs from the day you were served with the claim in which you seek contribution, not from the original events. It is a distinct deadline with its own start date, and it is easy to miss while you are focused on defending the main claim. If you have been served and think a third party is partly responsible, raise it with a defence lawyer early — and read up on what happens after a claim is issued.
One last trap catches people who already have a judgment. There is no limitation period to enforce a judgment of an Ontario court — you can pursue the debtor years later. But that rule does not extend to judgments from elsewhere. Enforcing a judgment from another province or country generally requires starting a proceeding in Ontario subject to the ordinary two-year limitation period, typically running from when the appeal rights on the original judgment were exhausted. If you are holding a judgment from outside Ontario, treat the two-year clock as live and get advice promptly — do not assume the "no limitation" rule for Ontario judgments protects it.
Generally two years from the day you discovered, or ought reasonably to have discovered, the breach — under section 4 of the Limitations Act, 2002. A 15-year ultimate period also applies, measured from the act or omission itself.
On the day you knew (or a reasonable person ought to have known) that you suffered a loss, that it was caused by the other party, and that a court proceeding was an appropriate response. The law presumes that day is the date of the breach unless you can prove you discovered it later.
Yes, in defined situations: while the person with the claim is a minor or legally incapable and unrepresented, or while both sides have agreed to an independent dispute-resolution process. A written, signed acknowledgment of the debt — or a part payment — can also reset the two-year clock.
The claim becomes statute-barred. The defendant can rely on the Limitations Act and the court will dismiss it regardless of the merits. There is rarely a way to revive a claim once the deadline has passed.
In a business agreement, yes — the parties can agree to shorten (or lengthen) the limitation period. A clause in a commercial contract may leave you with much less than two years, so the agreement has to be read closely. A contract dispute lawyer can tell you what your contract does to the deadline.
If you think a contract has been breached and you are unsure how much time you have, do not wait. Call 416-554-1639 or book a free consultation — and if a deadline is close, say so when you call.
Missing a limitation period can end an otherwise winning case. Jonathan Kleiman helps Ontario businesses and individuals act in time. Free 30-minute consultation.