The short version
- A contract claim accrues when the contract is broken. For an unpaid invoice that is the day payment fell due and did not arrive — not the invoice date, and not the last time the customer replied.
- The period is state law and the spread is wide. California allows four years on a written contract and two on an oral one; New York gives six years to both under a single subdivision of CPLR 213.
- Sales of goods run on their own clock. UCC § 2-725 gives four years from the breach regardless of whether you knew about it, and the parties may cut that to one year but cannot lengthen it.
- A signed writing acknowledging the balance restarts the period in most states. Part payment is far less reliable — California counts it only on a promissory note, and a payment never revives a claim already barred.
The clock starts when the contract was broken, not when you invoiced
A limitation period runs from accrual, and a claim accrues when the claimant has, in the Supreme Court's phrase, a complete and present cause of action. For an unpaid invoice that moment is unglamorous: the day the money was due and did not arrive. Everything before it — the work, the invoice, the first reminder — is preparation for a claim that does not yet exist.
Two habits push the date to the wrong place. The first is counting from the invoice: an invoice is a request for payment, not a breach, so on net 30 terms the breach is day 31. The second is counting from the last contact. A customer writing "we are on it" in March does not move a clock that started the previous year — unless what they wrote does far more work than that, which is a later section.
Four dates on one job, and the only one the statute cares about
Work finished
Nothing has been breached
You have performed; their obligation has not fallen due. Nothing to sue on yet.
Invoice issued
Still nothing
The date people instinctively count from. A request for payment, not a default.
Day after the due date
The claim is born
Payment was due and did not arrive. This is day one of the limitation period.
Two to six years on
The door shuts
Which end of the range depends on your state and on whether the deal was written.
Recurring obligations behave differently again. Under the theory of continuous accrual, an obligation arising on a recurring basis produces a fresh cause of action each time it is breached, with recovery limited to breaches inside the window. An unpaid retainer is rarely all-or-nothing: the oldest months drop away one by one.
Written or oral decides everything in some states and nothing in others
Many states run two periods: one for contracts in writing, a shorter one for everything else. California is the standard illustration — four years for an action founded upon an instrument in writing, two for one that is not. New York does not make the split at all. CPLR 213(2) gives six years to any contractual obligation, express or implied, so a handshake deal gets the same six years as a signed agreement.
| California | New York | |
|---|---|---|
| Written contract | Four years — CCP § 337(a) | Six years — CPLR 213(2) |
| Oral contract | Two years — CCP § 339 | Six years — the same subdivision |
| Sale of goods | Four years from breach — UCC § 2-725 | Four years from breach — UCC § 2-725 |
| Acknowledgment | Only in a signed writing — CCP § 360 | Only in a signed writing — GOL § 17-101 |
| Part payment | Counts on a promissory note; never revives a barred claim | Left to the common law — § 17-101 expressly does not alter its effect |
"Founded upon an instrument in writing" is narrower than "we have it in writing somewhere". Where the scope was agreed on a call and confirmed in a one-line email, which bucket you fall into is a live argument — and in a two-period state it is worth two years.
Goods, and the clock your own paperwork may already have shortened
If you sold goods rather than services, the UCC displaces the general period. UCC § 2-725 gives four years and is blunt about the start date: the cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of it. The exception is a warranty explicitly extending to future performance, where the clock waits until the breach should have been discovered.
The same section holds the trap. The parties may reduce the four years by their original agreement to as little as one year, but may not extend it. That is the general rule, not a UCC quirk: CPLR 201 allows a shorter time prescribed by written agreement, and forbids any court to extend the statutory one. So read your own standard terms and the customer's purchase-order terms before you look up a statute — a one-year clause in paperwork you accepted binds you whoever drafted it.
A few events stop the clock rather than shorten it. Tolling rules are narrow and state-specific — California, for instance, does not count time the defendant is absent from the state. Do not plan around tolling; it is a rescue argument, not a schedule.
A signed admission restarts the clock; a part payment might
Two separate mechanisms put time back on the clock, and people blur them constantly: an acknowledgment or fresh promise to pay, and a payment on account. A state can accept one and reject the other.
California is strict on acknowledgments and narrow on payments. No acknowledgment or promise counts unless it is in a writing signed by the party to be charged, and payment is carved out only for a promissory note — even then, no such payment of itself revives a cause of action once barred.
New York requires the same signed writing, then leaves the other mechanism alone: the statute says in terms that it does not alter the effect of a payment of principal or interest. Part payment there falls under common-law principles instead — the opposite structural choice, in almost identical language.
Restarting a live claim and reviving a dead one are different questions
What the debtor actually did
Has the limitation period already run out?
Still running
Already expired
Sent a payment, said nothing
Depends entirely on the state
Some treat it as an acknowledgment in itself. California counts it only on a promissory note.
Usually changes nothing
A payment on a dead claim rarely brings it back, and several states say so in the statute.
Signed something admitting the balance
The reliable restart
A writing signed by the debtor admitting the balance is what those statutes exist for.
The only route to revival
Where possible at all it takes a fresh written promise, and consumer debts are often carved out.
Debt acknowledgment template
Full text, free to read and copy — the balance as at a stated date, why it is owed, any schedule, a signature block. In most states this is what puts time back on the clock.
"Just take the $50" is a good move or a terrible one, depending which side you are on
A customer who has ignored four reminders offers $50 against a $4,000 invoice. The money is irrelevant. What is on offer is an opportunity, and it depends entirely on what you ask for alongside it.
What the token payment is actually worth to a creditor
Take the part payment
- Cash now, and proof the debt was treated as real
- In many states it restarts the period
- Costs nothing to ask for a signed line confirming the balance
Refuse it, hold out for the whole sum
- Keeps the demand clean and undiluted
- No argument later about what the payment settled
- The clock keeps running while you wait
Take it — and take a signed acknowledgment with it. Watch only for a cheque marked "payment in full".
That caveat is the real risk on this side of the table. A cheque tendered in full and final satisfaction is a different instrument from a payment on account, and banking one can be argued as settling the whole balance — the guide to full and final settlement sets out where the line falls.
The same facts read in reverse if you are the one being chased. The CFPB tells consumers plainly that a partial payment or an acknowledgment of an old debt, even after the period has expired, may restart it. A goodwill payment on a debt nobody has thought about in five years can hand back years of protection for the price of a takeaway.
Working out your own date
- 1
Fix the breach date, not the paperwork date
Write down the day performance was due and did not happen — for an invoice, the day after the payment term expired. Where several payments were missed, each has its own deadline.
- 2
Classify the contract
Written instrument, oral or part-oral, or a sale of goods under the UCC. In a two-period state this question alone is worth two years, so decide it on the documents rather than on how the relationship felt.
- 3
Read your own terms, then the right state's code
A written agreement can shorten the period and no court can extend it, so the shortest clause across both sides' paperwork governs. Then take the number from the statute itself rather than a summary, for the state the governing-law clause actually points at.
- 4
Look for anything that moved the date
A signed acknowledgment, a payment in a state where payments count, a defendant who left the jurisdiction, a bankruptcy stay. Each has to be evidenced, so pull the document now.
- 5
Diarise the expiry, minus a real margin
Put a date in the calendar several months before the deadline. On it you either escalate — a breach of contract notice, then a filing — or write the debt off deliberately. Filing on the last afternoon is how service problems become fatal ones.
The deadline is a management date, not a legal detail
Very few businesses lose a claim by misreading a statute. They lose it because nobody wrote the date down, so the file drifted from chasing to hoping to forgetting, and the calendar made the decision instead of anyone in the room.
Knowing the date changes the conversation while the debt is still alive. It tells you when a payment plan is worth taking and when it is a way of running out your clock, and whether the ladder in the guide on what to do when a customer will not pay has months to run or weeks. It turns whether small claims is worth it into a decision with a deadline attached — the only kind anybody actually makes.
Sources
- Cornell LII — statute of limitations
- Cornell LII — accrue
- UCC § 2-725 — statute of limitations in contracts for sale
- California CCP § 337 — four years, written contracts
- California CCP § 339 — two years, contracts not in writing
- California CCP § 360 — acknowledgment, promise and part payment
- California CCP § 351 — absence from the state
- California Courts self-help — when a contract is broken
- New York CPLR 213 — six-year limitations
- New York CPLR 201 — shortening by written agreement
- New York CPLR 214-i — consumer credit transactions
- New York GOL § 17-101 — acknowledgment in writing
- 12 CFR § 1006.26 — collection of time-barred debts
- CFPB — what is a statute of limitations on a debt?
- Aryeh v. Canon Business Solutions (Cal. 2013) — continuous accrual
General information, not legal advice. This guide explains how these documents and rules generally work. Law varies by jurisdiction and changes, and none of it is applied to your circumstances here. For anything consequential, consult a licensed attorney where you are.
Frequently asked
When exactly does the statute of limitations start on an unpaid invoice?
On the day payment fell due under the contract and did not arrive — not the day you did the work, and not the day you issued the invoice. On net 30 terms that is the thirty-first day. Where no payment date was agreed, the law constructs one, usually a reasonable time after performance or after a demand, and the period runs from there.
Is the deadline shorter for a verbal agreement?
In many states, yes, and the difference can be years. California allows four years for a contract founded upon a written instrument and two years for one that is not. Other states make no distinction at all: New York gives six years to any contractual obligation, express or implied. Check your own state, because this is one of the widest variations in the area.
Does making a partial payment restart the clock on a debt?
Sometimes, and it depends heavily on the state and on the kind of debt. Some states treat a payment on account as an acknowledgment that restarts the period. California recognises it only for payments on a promissory note. New York requires a signed writing for an acknowledgment but expressly leaves the effect of a payment of principal or interest to the general law.
What happens if the deadline passes — is the debt gone?
The obligation usually survives; the ability to enforce it in court does not. You can still ask to be paid. What you generally cannot do is sue, and some states now say so directly rather than leaving it as a defence the debtor has to raise. Federal rules also prohibit a debt collector from bringing or threatening legal action on a time-barred consumer debt.
Can a contract shorten the time I have to sue?
Usually yes, within limits, and this catches suppliers out constantly. New York allows a shorter period prescribed by written agreement while forbidding courts to extend the statutory one. For sales of goods, the UCC lets the original agreement reduce four years to no less than one, but never lengthen it. Read both sides' standard terms before relying on a statutory number.