Time Is of the Essence in Contract Law

A statute of limitations is the legal deadline for starting a lawsuit. In Ontario, if you don’t file your claim within this time limit, you lose the right to sue. Your case gets dismissed regardless of how strong your evidence is or how much you’re owed.

These deadlines exist to ensure disputes are resolved while evidence is fresh and witnesses remember what happened. They also give people certainty that they won’t be sued indefinitely for past actions.

Under Ontario’s Limitations Act, 2002, most civil claims have a two-year limitation period. The clock starts when you discovered (or should have discovered) you have a claim.

Discovery means knowing:

• That you suffered harm or loss
• That someone’s act or failure to act caused it
• That a lawsuit is an appropriate remedy

You don’t need to know the full extent of your damages or the legal name for your claim; just that something happened that warrants legal action.

This is often disputed. The limitation period starts when you discover (or should have discovered) the claim, not necessarily when the harmful act occurred. Each case is fact specific. 

Example 1: You’re fired on January 1, 2023. You immediately know you’ve been terminated without proper notice. Your two-year deadline starts January 1, 2023, expiring January 1, 2025.

Example 2: Your accountant makes an error in your 2020 tax return, but you don’t discover it until 2023 when the CRA audits you. Your two-year deadline likely starts in 2023 when you discovered the error, not in 2020 when it was made.

Even if you didn’t discover your claim, there’s a hard stop. You cannot start a lawsuit more than 15 years after the act or omission that caused the harm, with limited exceptions for certain cases (e.g. sexual assault).

This ultimate deadline prevents lawsuits based on ancient events where evidence has disappeared and memories have faded.

Your claim is statute-barred: that is, legally dead. The defendant can ask the court to dismiss your case immediately without addressing whether you have a valid claim. No exceptions, no extensions (except in very rare circumstances like fraud or disability).

Waiting to see if things improve: Many people delay suing, hoping the other party will pay or fix the problem voluntarily. Every day you wait brings you closer to the deadline.

Thinking negotiation stops the clock: Talking, negotiating, or mediating doesn’t pause limitation periods. Only filing a lawsuit stops the clock.

Assuming you have more time: People often think “I have plenty of time” only to discover they’ve missed the deadline by days or weeks.

Not knowing when discovery occurred: Arguments about when you “should have known” about your claim can be complex. Don’t assume you have a full two years from today.

Confusing different limitation periods: Not all claims have two-year limits. Special rules apply to specific situations.

See a lawyer immediately: Even if it’s days before the deadline, a lawyer can file a basic Statement of Claim to preserve your rights.

Gather essential information: You need names, addresses, and basic facts to start a lawsuit.

File something: It’s better to file a basic claim on time and amend it later than to miss the deadline entirely.

Time limits are strict and unforgiving. If something happens that might lead to a lawsuit, calendar the deadline and get legal advice immediately. Prevention is simple: act quickly.

Contact Pinto Shekib LLP at info@pintoshekib.ca or 416.901.9984 to schedule a confidential consultation about your claim and limitation deadlines.