California Breach of Oral Contract Statute of Limitations: Two Years Under CCP § 339

What the statute says

Section 339 sets a two-year period for actions on a contract, obligation, or liability not founded on a written instrument, with limited exceptions, and for actions on a title insurance policy. The same two-year period applies to an action against a sheriff or coroner on a liability incurred in an official capacity, including failure to pay over money collected on a judgment, and to an action based on the rescission of a contract not in writing.

For a rescission claim, the period runs from the occurrence of the grounds for rescission — or, where the ground is fraud or mistake, from discovery of those facts.

When the clock starts

As with written contracts, an oral contract claim generally accrues on breach. The practical difficulty is rarely accrual and almost always characterisation: whether the agreement is “founded upon an instrument of writing” at all. A partly written, partly oral agreement, or a written agreement modified orally, can move the claim between the four-year period in section 337 and the two-year period here.

Key exceptions and tolling

• Written contracts are four years.An action founded upon an instrument in writing carries the four-year period in Code of Civil Procedure section 337.
• Rescission accrual.For rescission of an unwritten contract, the period runs from the occurrence of the grounds for rescission, or from discovery where the ground is fraud or mistake.
• Common counts.Quantum meruit and other implied-in-law theories are generally treated as obligations not founded on a writing and take the two-year period.
• Minors and incapacity.Code of Civil Procedure section 352 generally excludes the period of a plaintiff's minority or lack of legal capacity at accrual.
• Public entity defendants.A contract claim against a public entity requires Government Code claim presentation, generally within one year for non-injury causes of action.

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