How Long Do You Have to Sue for Breach of Contract in Ontario?

Ontario’s Limitations Act, 2002 sets out the framework that governs how long you generally have to start a lawsuit for breach of contract, and for most claims, the answer is a basic limitation period of two years. This is sometimes called the “basic limitation period,” and it applies broadly across many types of civil claims, not just contract disputes — although contract claims are among the most common situations where it comes into play.

It’s worth being precise about what this means in practice: it’s not two years from when the contract was signed, and it’s not two years from when the contract was supposed to be fully performed. It’s two years from the date the claim was discovered — a concept that sounds simple but has generated a fair amount of legal analysis, because “discovery” doesn’t always happen the moment something goes wrong.

Missing this deadline is one of the most consequential mistakes a person or business can make in a contract dispute. Once the limitation period expires, a claim is generally barred entirely, regardless of how strong it might otherwise have been. A court will not typically evaluate the merits of an expired claim — the case simply cannot proceed. This is why identifying the applicable limitation period early, ideally as soon as a dispute becomes apparent, is one of the most important steps in managing any contract problem.

Under the Limitations Act, 2002, a claim is “discovered” on the earlier of the day the person with the claim first knew, or the day a reasonable person in their circumstances ought to have known, that: an injury, loss or damage had occurred; it was caused by an act or omission of the person being claimed against; that act or omission was that of the person being claimed against; and a legal proceeding would be an appropriate way to remedy it.

In many contract disputes, discovery happens quickly and obviously — a payment is due on a specific date, it isn’t made, and the breach is discovered the day it becomes overdue. In other cases, discovery can be delayed. A defect in completed work, for example, might not become apparent until months after the work was finished, and the limitation clock in that scenario generally starts running from when the defect was, or reasonably should have been, discovered — not from the date the work was originally completed.

This discovery-based approach means two people with what looks like the same type of claim can have different deadlines, depending on when each of them reasonably became aware of the problem. It also means that simply not noticing a breach for a long time doesn’t necessarily protect you from the limitation period — the test includes what a reasonable person in your position ought to have known, not just what you actually knew.

A few examples help illustrate how this plays out. If an invoice goes unpaid, discovery typically happens on or shortly after the due date, once it becomes clear payment isn’t coming. If a contractor’s work later turns out to have been done improperly, discovery may not occur until the defect actually surfaces — sometimes long after the work was finished — and the clock generally starts from that later point. If a business partner quietly diverts an opportunity that should have gone to the partnership, discovery might not occur until financial records are reviewed and the diversion becomes apparent. Each scenario turns on the same underlying question: when did the claimant know, or when reasonably should they have known, that they had a claim worth pursuing?

Alongside the two-year basic limitation period, Ontario’s Limitations Act, 2002 also establishes an ultimate limitation period of 15 years, running from the date of the act or omission that gave rise to the claim — regardless of when it was discovered. In most everyday contract disputes, the two-year discovery-based period will expire long before the 15-year ultimate period becomes relevant, but the ultimate period exists as a hard outer boundary for claims involving delayed discovery.

There are some circumstances where the running of a limitation period can be affected — for example, where a person is incapable of managing their affairs, or in certain cases involving fraud that was deliberately concealed. These are narrower, fact-specific exceptions rather than the general rule, and they don’t change the basic approach for the large majority of contract disputes.

One helpful way to think about the relationship between the two periods is that the 15-year ultimate period acts as a backstop, not a substitute, for the two-year rule. If you discover a claim on day one, you still generally have only two years to act, even though you’re nowhere near the 15-year mark. The ultimate period only becomes relevant in the comparatively unusual situation where discovery itself is significantly delayed — for instance, where a problem was actively concealed, or where the connection between an act and a loss only became apparent much later through no lack of diligence on the claimant’s part.

Not every type of claim follows the standard two-year rule. Certain claims are subject to different limitation periods set out in other Ontario statutes, which can override the general rule in the Limitations Act, 2002 for that specific type of claim. For this reason, it’s important not to assume the two-year period automatically applies without confirming that no other statute sets a different deadline for your specific situation.

Claims involving governments or public bodies can also carry special notice requirements — sometimes requiring formal written notice of a claim within a much shorter window than two years, even though the ultimate lawsuit may still need to be started within the normal limitation period. If your dispute involves a municipality, government agency, or public institution, it’s worth checking for these kinds of notice requirements separately from the general limitation period analysis.

Claims between partners in a business, disputes involving trusts, and some categories of continuing breaches (where a breach recurs or continues over time, such as an ongoing failure to pay instalments) can also raise more nuanced discovery and limitation questions. In those situations, it’s often worth confirming the applicable deadline carefully rather than assuming a single, simple two-year countdown applies cleanly to every part of the claim.

It’s also worth distinguishing a limitation period from a warranty period or a contractual notice requirement. A contract might require you to notify the other party of a defect within, say, 30 or 90 days to preserve a warranty claim — but that contractual notice window is separate from, and generally shorter than, the limitation period for actually starting a lawsuit. Missing a warranty notice deadline can weaken a claim considerably even if the broader limitation period hasn’t expired, so both deadlines are worth tracking independently.

Some contracts include a clause purporting to shorten or otherwise modify the limitation period that would otherwise apply. Ontario law places restrictions on this: parties are generally not permitted to reduce the basic two-year limitation period below what the Limitations Act, 2002 allows, in relationships covered by the Act, though there are narrower circumstances — particularly in some business-to-business contracts — where limited variation may be permitted.

Because the rules around contractual limitation clauses can be technical, and because getting this wrong can mean permanently losing the right to pursue an otherwise valid claim, it’s worth reading any limitation-related language in a contract carefully — and treating it as a flag to confirm the actual applicable deadline, rather than simply relying on what the clause says at face value.

If you’re unsure whether a limitation period may be close to expiring, the safest general approach is to act as though it is. Gather your documentation, confirm the date the problem was discovered (or should reasonably have been discovered), and take whatever formal step is appropriate — sending a demand letter, starting a Small Claims Court claim, or filing a Superior Court action — well before the deadline you’ve identified, rather than waiting until the last possible moment.

Because the discovery rule can be genuinely uncertain in some situations — particularly where a loss unfolded gradually or wasn’t immediately obvious — this is one area of Ontario contract law where getting a second opinion before a deadline passes is particularly valuable. A missed limitation period generally cannot be undone once it has expired, which makes early confirmation of the applicable deadline one of the highest- value steps in managing any potential contract claim.

It’s also worth remembering that starting a claim doesn’t have to mean immediately committing to a full trial. Filing a Small Claims Court or Superior Court claim within the limitation period preserves your legal position, and settlement discussions, mediation, or a negotiated resolution can still happen after a claim is filed. What matters most from a limitations standpoint is that the formal step of starting the proceeding happens before the deadline — not that the entire dispute is fully resolved by that date.