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Problems of Interpreting Statutes of Limitations in Cases of Continuing Breach of Contract

Canadian Business Law Journal, December 2013, Vol. 54, No. 3, 411-24.

14 Pages Posted: 11 May 2013 Last revised: 4 Jul 2014

Peter S. Spiro

University of Toronto - Mowat Centre for Policy Innovation, School of Public Policy and Governance

Date Written: May 9, 2013

Abstract

Most authorities hold that a cause of action for breach of contract crystallizes as soon as the breach has occurred. Logically, for statutes of limitations, the time will start to run from that point. Quite a number of Canadian cases, particularly in Ontario, have taken a very different approach. Where the injured party affirms the contract rather than terminating it for breach, the contract remains in force and it can be said that there is a continuing breach. Several decisions have held that each missed payment or other omission by the party in breach is counted as a new cause of action. As a result, the statute of limitations will never apply to completely bar a claim. However, other cases, particularly at the federal level, have taken the opposite approach, and rejected this idea as inconsistent with the principle of limitations. This was quite forcefully stated by the Supreme Court of Canada in Wewaykum (2002). Recent decisions of the English Court of Appeal and House of Lords have also moved away from the continuing breach principle.

Keywords: statute of limitations, breach of contract, continuing breach

Suggested Citation

Spiro, Peter S., Problems of Interpreting Statutes of Limitations in Cases of Continuing Breach of Contract (May 9, 2013). Canadian Business Law Journal, December 2013, Vol. 54, No. 3, 411-24.. Available at SSRN: https://ssrn.com/abstract=2263024 or http://dx.doi.org/10.2139/ssrn.2263024

Peter Samuel Spiro (Contact Author)

University of Toronto - Mowat Centre for Policy Innovation, School of Public Policy and Governance ( email )

720 Spadina Avenue, Suite 218
Toronto, Ontario M5S 2T9
Canada

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