Oral Agreement Statute of Limitation: What You Need to Know
An oral agreement, also known as a verbal agreement, is a contract made between two parties without a written document. While oral agreements can be legally binding, they may also be subject to certain limitations, including the statute of limitations.
The statute of limitations refers to the time frame in which a legal action can be taken. Once this period has passed, the right to legal action is lost forever. Therefore, it is important to understand the statute of limitations when it comes to oral agreements.
In most states, the statute of limitations for oral agreements is two to three years from the date of the agreement. However, this can vary depending on the nature of the agreement and the state in which it was made.
For example, in California, the statute of limitations for oral agreements is two years for most contracts, but can be up to four years for some agreements related to real estate or medical debt. In contrast, some states have a shorter statute of limitations of only one year.
It is also important to note that the statute of limitations may be tolled, or extended, in certain situations. For example, if one of the parties to the oral agreement was under duress or was a minor at the time the contract was made, the statute of limitations may not begin to run until the party reaches the age of majority or the duress ends.
Additionally, some states have what is known as a “discovery rule,” which means that the statute of limitations does not begin to run until the aggrieved party discovers or should have discovered the breach of the agreement.
Overall, understanding the statute of limitations for oral agreements is crucial in order to protect one’s legal rights. If you believe that an oral agreement has been breached, it is important to seek legal advice promptly in order to determine whether legal action can still be taken.