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Breach of contract statute of limitations

Breach of contract statute of limitations

Postby Scienke » Sun May 14, 2017 11:02 am

A signs a contract with B containing a clause in it that A is no longer happy to abide by. Let's say for example it's a confidentiality clause of some sort.

A contacts B and tells him that that he no longer wishes to abide by the confidentiality clause and invites B to take action if he has a problem with his change of heart.

A reassures B that this does not mean he will go blabbing to everyone who will listen. But A is clear that if he is asked about things that he has previously agreed to stay silent about he will not stay silent.

The statute of limitations says that a breach of contract claim has to be made within 6 years.

Does the 6 years limitation period begin in the above scenario as soon as A informs B of his intention to breach confidentiality if the situation arises? Or does it not start until A actually carries out an actual breach, which he may never do?
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Re: Breach of contract statute of limitations

Postby Smouldering Stoat » Sun May 14, 2017 11:13 am

Time starts to run when A breaches the contract. Until he has done so, there is no cause of action.
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Re: Breach of contract statute of limitations

Postby atticus » Sun May 14, 2017 11:54 am

If B is seriously worried she can go to Court for an injunction to stop A from doing whatever he is saying he may do. That is what celebrities do.
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Re: Breach of contract statute of limitations

Postby Scienke » Sun May 14, 2017 2:05 pm

Can an injunction stop someone from breaching a contract if the contract itself says "if you breach this contract you will need to pay us x amount in damages".

Surely that's all the wronged party (B) could hope to expect? If (A) was happy enough to pay the amount owed then what more could an injunction do?
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Re: Breach of contract statute of limitations

Postby atticus » Sun May 14, 2017 2:33 pm

An injunction is a court order not to do, or sometimes to do, something. So yes, an injunction, if ordered, would be an order not to do an act in breach of the contract.

That provision does not permit breach of contract. And if confidentiality is so important, that is a pretty stupid clause to put in the agreement.
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Re: Breach of contract statute of limitations

Postby Scienke » Sun May 14, 2017 3:35 pm

Take an employment settlement agreement for instance. They usually say that if you breach any of the terms of this agreement you agree to pay us back all the money we gave you.

If an employee decided that she no longer wanted the money and instead wanted to speak out about what the employer did to her then providing she returned the money what could an injunction do?
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Re: Breach of contract statute of limitations

Postby atticus » Sun May 14, 2017 5:11 pm

An injunction could stop whatever it is before it is done.

Is there anything else you want to add to the scenario that you have not already said? We are now not talking about a confidentiality agreement, but about a confidentiality clause in a contract that has a different primary purpose.
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Re: Breach of contract statute of limitations

Postby dls » Sun May 14, 2017 6:03 pm

An injunction is a court order. An intentional breach of a court order can be contempt of court. Contempt of court can be punished with imprisonment.
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Re: Breach of contract statute of limitations

Postby Scienke » Sun May 14, 2017 6:05 pm

atticus wrote:An injunction could stop whatever it is before it is done.

Is there anything else you want to add to the scenario that you have not already said? We are now not talking about a confidentiality agreement, but about a confidentiality clause in a contract that has a different primary purpose.



Haha no - thanks for your patience. I just have settlement agreements on the brain recently.

Although I do have another scenario posted in my tax indemnity thread that if you could find the time to ponder would be great.
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Re: Breach of contract statute of limitations

Postby Scienke » Mon May 22, 2017 7:17 pm

Scienke wrote:Does the 6 years limitation period begin in the above scenario as soon as A informs B of his intention to breach confidentiality if the situation arises? Or does it not start until A actually carries out an actual breach, which he may never do?


Smouldering Stoat wrote:Time starts to run when A breaches the contract. Until he has done so, there is no cause of action.


Anticipatory breach? As far as I can figure this is where one party has been notified that another party has no intention of carrying out their side of the bargain but they have not necessarily committed an actual breach yet.

I wonder how long the innocent party can do nothing about an anticipatory breach before they are seen to have reafirmed the contract?

http://www.inhouselawyer.co.uk/index.ph ... ry-breach/
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