Pennsylvania Statutes on a Breach of Contract
- Most legal actions, including suing for breach of contract, have a legal time limit imposed to bring such a lawsuit. This limit is the statute of limitation. In Pennsylvania, the statute of limitation for a breach of contract action is four years. This applies to most types of contracts, including those between merchants or businesses. However, state law allows for a contract between businesses to specify a customized statute of limitations of between one and four years. In the absence of such a specification, the statute rule of four years is legally presumed.
- A major legal issue in a breach of contract case is determining at what point did the breach occur. This is important because of the application of the statute of limitation. Where a contract specifies a certain action on a certain date and it does not occur, the breach is dated from that point. For example, if the contract says a buyer will pay for a purchase on Feb. 1 and she does not, the breach and thus the statute of limitation runs from that date. If there is a warranty for future performance of the goods, the breach and the time limit will run from the date the buyer discovers the goods do not meet the warranted performance.
- In the case of a breach of warranty in which the seller represents that he can repair the problem and undertakes such repairs, that period of time does not count against the statute of limitation. In a case in which one of the parties commits fraud that prevents the discovery of a breach, the time limit only starts to run from the time the damaged party discovers the breach. For example, a seller presents forged maintenance records to the buyer for an automobile. The statute of limitation will only start to run when the fraud is discovered, not from the date of the contract.
- Even when all the statutory rules allow a lawsuit for a breach of contract, three legal requirements must be met for the suing party to be successful. There must be a legally recognizable contract. For example, contracts regarding real estate or the sales of goods over $500 must be in writing. The alleged breaching party must have violated a legally recognizable duty. For example, an intervening act of war or natural disaster is a legal excuse not to perform a contract obligation fully or on time. The suing party must show that she suffered legally recognizable damages as a result of the breach.