Client Alert: Ohio to Shorten Time to Bring Suit on Some Contracts

A statute of limitations governs the time in which a party must file a lawsuit, usually set at a specific number of years (e.g., 2, 4, 6, etc.) that begins to “run” from the occurrence of a triggering event. For example, assume ABC Co. signs a contract with Pro Painting Services to have its offices repainted for $1,000 a room. Pro Painting shows up, paints 10 rooms, invoices ABC for $10,000, but ABC refuses to pay. The statute of limitations would govern the period in which Pro Painting must bring an action—i.e., file a lawsuit—to obtain damages for ABC’s breach of contract.

In Ohio, statutes of limitation are established by particular sections of the Ohio Revised Code that set the limitations periods depending on the type of claim at issue. There is a statute of limitations for almost every claim possible, from tort claims, to contract claims, to property claims, and almost any claim in between. Understanding the limitations period applicable to your claim is critical because, in most circumstances, once the statute of limitations has run, you are barred from bringing a lawsuit.

Of particular importance to Pro Painting, and any other similarly situated company, on March 16, 2021, Ohio Governor Mike DeWine signed into law the provisions of Senate Bill 13 amending Revised Code Sections 2305.06 and 2305.07 to shorten the statute of limitations that generally apply to actions involving the failure to perform certain types of contracts. In particular, Senate Bill 13:

1. Shortens the limitations period in R.C. 2305.06 for written contracts (subject to certain exceptions) from 8 years to 6 years;
2. Shortens the limitations period in R.C. 2305.07 for oral contracts (subject to certain exceptions) from 6 years to 4 years; and
3. Creates a new 6-year statute of limitations (R.C. 2305.07(C)) for contract claims “arising out of a consumer transaction incurred primarily for personal, family, or household purposes.”

Critically, the new statute of limitations applies to all contract claims “arising out of a consumer transaction,” specifically including actions on “an account stated,” creates a new accrual or triggering date for the running of the limitations periods, and also appears to displace the 4-year statute of limitations period previously applicable to claims involving the sale of goods to a consumer. Given the creation of new limitations periods (either by shortening the previously applicable periods or creating new ones), Senate Bill 13 also provides how the statute of limitations will be calculated for claims that accrued prior to its effective date, setting the deadlines as the shorter of the original limitations period or the newly imposed limitations period. And, on top of all of this, Senate Bill 13 alters Ohio’s “borrowing statute” (by which an Ohio court may apply another state’s limitations period in certain actions) and creates a new statute of repose for legal malpractice claims. All-in-all, the Legislature and Governor DeWine instituted some significant changes.

There are, of course, a number of exceptions to these new statutes of limitations for particular types of contracts or claims that are subject to limitations periods found in other sections of the Revised Code. The key takeaway, therefore, is that you should be vigilant to protect your rights now more than ever. If you have any questions or concerns about your rights to bring a suit, or the limitations period applicable to those claims, contact your attorney immediately. Delay may prevent you from enforcing your rights.