Ohio Shortens Statute of Limitations for Claims Based on Contracts

Yesterday, Governor Mike DeWine signed into law a bill that shortens the statute of limitations period for lawsuits based on contract. Senate Bill 13 reduces the statute of limitations from six (6) years to four (4) years for oral contracts, and from eight (8) years to six (6) years for written contracts. The statute does not specifically explain when a cause of action “accrues,” but generally, under Ohio law, a claim accrues at the time the breach of contract occurs.  This applies to all causes of action that accrue (the breach occurs) after the effective date of the Act, which is June 14, 2021.
 
Effective June 14, 2021, Ohio Revised Code 2305.06 requires parties to assert breach of contracts claims for written contracts within six (6) years after the cause of action accrues. Claims that accrued before June 14, 2021, must be brought by the earlier of June 14, 2027, or the remaining period under the prior (8-year) statute of limitations. 
 
For oral contracts, effective June 14, 2021, the amended Ohio Revised Code 2305.07(A) requires parties to assert breach of contracts claims within four (4) years after the cause of action accrues. Claims that accrued before June 14, 2021, must be brought by the earlier of June 14, 2025, or the remaining period under the prior (6-year) statute of limitations. 
 
Lastly, the new Ohio Revised Code 2305.07(C) requires parties to assert breach of contracts claims arising out of most consumer transactions within six (6) years after the cause of action accrued.  Consumer transaction claims that accrued before June 14, 2021, must be brought by the earlier of June 14, 2027, or the remaining period under the prior applicable statute of limitations, whichever is shorter.
 
The new statute of limitations does not apply to all contract-based claims. The following are exceptions to this new rule, and the prior statute of limitations remains for:

1. Actions against the State (other than unclaimed funds) ― five (5) years
2. Actions under UCC Article 2 for the sale of goods ― four (4) years
3. Actions on a Note under the UCC ― six (6) years;
4. Actions under the CPSA ―two (2) years
5. Actions to recover title or possession of real estate ― 21 years
6. Actions for liability created by statute other than a forfeiture or penalty ― six (6) years