You discover a supplier failed to deliver, a customer hasn’t paid, or a contractor did substandard work. The breach is clear. Your loss is real. And then someone asks: “When did this happen?”
That question matters more than you think.
Australia has strict time limits on when you can sue for breach of contract. Miss the deadline and your claim dies, regardless of how strong it is. The other side simply raises the limitation defence, and the court shuts you down before you even get to argue the merits.
Limitation periods aren’t just legal trivia. They’re the hard backstop on your ability to recover losses. And the clock starts ticking the moment the breach occurs, not when you finally decide to act.
This article walks you through the rules, the exceptions, and the practical steps you need to take before time runs out.
Key Takeaways
- The general rule is six years – most breach of contract claims in Australia must be commenced within six years from the date of breach (the limitation period varies slightly between states and territories)
- The clock usually starts when the breach occurs – not when you discover it, not when you decide to act, and not when negotiations fail
- Deeds have longer timeframes – if your contract was executed as a deed, you typically have 12 years or more depending on the jurisdiction
- Contractual time bars can shorten everything – many commercial contracts require you to notify a claim within 30, 60 or 90 days and commence proceedings within 12 months, regardless of what the statute says
- Negotiations don’t stop the clock – unless you have a formal standstill agreement in writing, the limitation period keeps running while you’re talking
- If you’re close to the deadline, act now – secure evidence, build a timeline, check the contract and governing law, and get legal advice before you run out of road
Why time limits decide disputes before they begin
Litigation shouldn’t feel like wandering through fog. Yet for many businesses, that’s exactly what happens when they wait too long to act on a breach.
You think you’re being reasonable. You give the other party time to fix the problem. You try to negotiate. You escalate internally. You wait for board approval. You explore alternatives.
And then one day, quietly, your legal right to sue expires.
The law doesn’t care that you were being patient. It doesn’t care that you were acting in good faith. The limitation period is a guillotine, not a guideline.
Here’s what most people don’t realise: limitation periods exist to force disputes forward. Courts won’t let you sit on a claim indefinitely while evidence fades, witnesses move on, and the other side loses the ability to defend itself. The policy is ruthless but clear: bring your claim within the prescribed time, or lose the right to bring it at all.
And no, “I didn’t know there was a time limit” doesn’t count.
If you’re facing a breach, or you suspect one has occurred, the single most important question you need to answer is: how much time do I actually have?
Expiry of the limitation period doesn’t void the contract or erase the debt. It simply bars you from suing to enforce it. The other side can still choose to perform or pay, but they’re under no legal compulsion to do so.
The general rule: six years from breach
In most Australian states and territories, you have six years to commence proceedings for breach of a simple contract. That’s the default rule.
Six years sounds like a long time. It isn’t.
Think about how disputes actually unfold. The breach happens. You wait to see if they’ll fix it. You escalate to management. You try informal resolution. You get legal advice. You consider commercial options. You wait for your own internal approvals. You negotiate terms of settlement. Months pass. Sometimes years.
Before you know it, you’re in year five. And if you don’t have proceedings on foot by the six-year mark, your claim is dead.
The six-year period applies to most contract claims: breach of supply agreements, service contracts, consultancy arrangements, unpaid invoices, failed projects, defective goods. If the contract is in writing but not executed as a deed, assume six years unless you know otherwise.
Here’s where it gets state-specific. The limitation period is set by state and territory legislation, and while six years is the norm, there are variations:
- New South Wales, Victoria, Queensland, South Australia, Tasmania, Western Australia and the ACT all apply a six-year limitation period for simple contract claims.
- The Northern Territory has shorter periods in some cases, with a three-year limit for certain contract claims.
If your contract involves parties in different states, or if it specifies a governing law different from where you’re based, you need to check which state’s limitation law applies. The contract’s governing law clause usually determines this.
Don’t guess. Pull the contract. Check the jurisdiction. Know your deadline.
The six-year clock starts on the date of breach, not the date you discover the loss or decide to act. If a supplier was supposed to deliver in March 2019 and didn’t, your limitation period likely started in March 2019, not when you realised in 2021 that the delay had cost you a major contract.
When does the clock actually start running?
This is where businesses get it wrong.
The limitation period doesn’t start when you become aware of the problem. It doesn’t start when you receive legal advice. It doesn’t start when negotiations break down.
It starts when your “cause of action accrues”, which in most breach of contract cases means the date of the breach.
Let’s make that concrete.
You enter a supply agreement. The supplier is required to deliver goods by 15 June 2020. They don’t deliver. The breach occurs on 15 June 2020. The limitation clock starts ticking that day. You have until 15 June 2026 to commence proceedings (assuming a six-year period applies).
It doesn’t matter that you didn’t chase them until August. It doesn’t matter that you only instructed lawyers in 2023. The breach happened on the contractual delivery date, and that’s when time started running.
Now consider a slightly different scenario: ongoing obligations.
You have a three-year maintenance contract. The contractor is required to perform monthly inspections. They fail to perform the inspection in January 2021. That’s a breach. If you want to claim for the consequences of that specific breach, the limitation period for that claim starts in January 2021.
But if they then fail again in February 2021, that’s a separate breach with its own limitation period starting in February 2021.
This is what lawyers call a “continuing breach” or a series of breaches. Each failure to perform gives rise to a fresh cause of action. In practical terms, that means you can still sue for recent breaches even if earlier breaches are now time-barred.
What about repudiation or termination?
If one party repudiates the contract (essentially, walks away or refuses to perform), the limitation period usually starts on the date of repudiation, not the date when performance was originally due. But this depends on whether you accept the repudiation and treat the contract as at an end, or whether you affirm the contract and insist on performance.
The point: accrual is a legal question that turns on the specific facts of your contract and the type of breach. You can’t just guess.
If your contract involves rolling obligations, staged payments, or a long-term relationship, you may have multiple limitation periods running at once. Don’t assume that because the contract started in 2018, you have until 2024 to bring every possible claim. Each breach has its own clock.
Deeds change the timeframe significantly
Not all contracts are created equal. And if your agreement was executed “as a deed”, the limitation period is usually much longer.
Most Australian jurisdictions give you 12 years to sue on a deed. Some go further: in New South Wales and South Australia, certain deed claims can be brought within 15 or even 20 years depending on the type of claim.
That’s double (or more) the time you’d have for a simple contract.
So how do you know if your contract is a deed?
A deed isn’t just a formal-looking document with lots of signatures. It’s a specific legal instrument that must meet strict execution requirements. Typically, a deed must:
- State on its face that it is a deed (e.g. “executed as a deed” or “signed, sealed and delivered”)
- Be signed by the parties in the presence of a witness
- Be delivered (which is usually presumed if it’s signed and dated)
If the document doesn’t meet those requirements, it’s not a deed. It’s a simple contract, and the six-year rule applies.
Deeds are common in certain contexts:
- Shareholder agreements and unitholders’ deeds
- Mortgages and security documents
- Long-term leases
- Guarantees
- Deeds of settlement or release
- Major infrastructure or construction contracts
Why does this matter?
If you’re sitting on a potential claim under a shareholder agreement that was executed as a deed, you may have 12 years to act instead of six. That’s a significant breathing space. Conversely, if you’re defending a claim and the other side is relying on a deed, you need to know they have more time than you might expect.
Check your documents. Don’t assume. If the contract says “deed” at the top and has witness signatures, it’s probably a deed. If it just says “agreement” and is signed by the parties without witnesses, it’s probably not.
Even if your original contract is a simple agreement, any subsequent deed of variation or deed of settlement will itself be a deed and attract the longer limitation period. This can create complex timing issues if you’re claiming under both the original agreement and a later variation.
Contractual time bars can kill your claim faster than the statute
Here’s the trap that catches even experienced in-house counsel: the limitation period under statute is just the outer limit. Your contract can impose much shorter deadlines.
Many commercial contracts include notice provisions or time bar clauses that require you to notify a claim within 30, 60 or 90 days of becoming aware of the issue, and to commence proceedings within 12 or 24 months of the breach.
If you miss those contractual deadlines, you’re barred from bringing the claim, even though the statutory six-year period is still running.
These clauses are especially common in:
- Construction contracts (notice of delay, notice of defects, notice of claims)
- Transport and logistics agreements (claims for lost or damaged goods)
- IT and software agreements (notice of non-conformance, breach of warranty)
- Professional services contracts (claims for negligence or breach of duty)
- Insurance policies (notification requirements, limitation of actions)
A typical clause might read:
“The Client must notify the Contractor in writing of any claim within 30 days of becoming aware of the circumstances giving rise to the claim. No claim may be brought more than 12 months after the date on which the breach occurred.”
Courts enforce these clauses strictly. They’re legitimate risk allocation mechanisms. If you don’t comply, you lose the right to claim, full stop.
So what should you do?
First, read your contracts. All of them. Not just the main agreement, but any supplementary terms, schedules, or incorporated standard terms (such as industry standard forms like AS4000 in construction).
Second, diarise the key dates. If there’s a 30-day notice requirement, put a reminder in your system the moment you suspect a breach.
Third, don’t wait to investigate. If the clock is 30 days from “becoming aware”, you can’t spend 29 days deciding whether to do something. You need to act within days, not weeks.
Fourth, comply strictly with the form of notice. If the contract says written notice to a specific address or person, send it that way. Email to the project manager doesn’t count if the clause requires notice to the registered office.
Can you negotiate these clauses?
Yes. If you’re reviewing a contract before signing, these time bar clauses are negotiable. Push for longer periods. Push for notice requirements that are reasonable, not punitive. Make sure your legal and commercial teams understand the practical implications before you agree.
If the contract is already signed, you’re stuck with what you agreed. Your only option is strict compliance.
Contractual time bars aren’t just about limitation periods. They’re about process. Missing a procedural step can be just as fatal as missing a statutory deadline. If your business doesn’t have internal processes to catch these clauses, build them now.
Can the limitation period be extended or paused?
Short answer: in narrow circumstances, yes. But don’t rely on it.
Australian limitation laws do allow for extension or suspension of the limitation period in specific situations. The most common are:
Fraud or deliberate concealment: If the other party actively concealed the breach or engaged in fraud, the limitation period may not start running until you discover (or reasonably should have discovered) the fraud or concealment. This is a high bar. You need to show deliberate conduct designed to hide the breach, not just silence or non-disclosure.
Acknowledgement or part payment: If the other party acknowledges the debt or breach in writing, or makes a part payment on account of the debt, that can restart the limitation period. This is particularly relevant in debt recovery. A written acknowledgement or a payment made in the last six years can give you a fresh six-year period from the date of the acknowledgement or payment.
Disability: If the person with the claim is under a legal disability (such as being under 18 or lacking mental capacity), the limitation period may not start running until the disability ends. This is more relevant in personal disputes than commercial ones, but it exists.
Equitable relief: In some cases, courts have the power to extend time for equitable claims (like claims for breach of trust or fiduciary duty). This doesn’t usually apply to straightforward contract claims, but it’s worth knowing the boundary if your dispute involves directors’ duties or trust arrangements.
Here’s the critical point: these are exceptions, not the rule. And they’re heavily fact-dependent.
You can’t just argue “they didn’t tell me about the problem, so I should get more time”. The law requires active concealment, not mere silence. And you can’t rely on an acknowledgement unless it’s clear, unequivocal and in writing.
If you’re already close to the limitation deadline, do not assume an extension will save you. Assume the deadline is hard, and act accordingly.
If the other party has made part payments or sent letters acknowledging the debt, keep those records meticulously. They may give you a fresh limitation period. Conversely, if you’re defending a claim, be very careful what you put in writing. A poorly worded “without prejudice” letter can restart the clock.
Negotiations don’t stop the clock (and that’s a problem)
You’re six months into negotiations. The other side is engaging. You’re exchanging proposals. There’s genuine discussion about settlement. Everyone seems to be acting in good faith.
The limitation period is still running.
This is one of the most common mistakes businesses make: assuming that active negotiations, mediation, or dispute resolution processes somehow pause the limitation clock.
They don’t.
Unless you have a formal standstill agreement in writing, time keeps ticking. And if you’re still negotiating when the six-year mark passes, your claim is gone.
Here’s how this plays out in practice:
You discover a breach in January 2020. You raise it with the other side in March 2020. They acknowledge there’s an issue and agree to “work something out”. You exchange emails, have meetings, go back and forth on quantum. By December 2022, you’re still talking. You think you’re close to settlement. They suddenly go silent. You instruct lawyers in mid-2023. Your lawyers tell you the limitation period expires in January 2026.
You think: “No problem, we have three years.”
But then they refuse to settle. You issue proceedings in late 2025. They raise a limitation defence. And you realise that the real breach you’re claiming for occurred in 2019, not 2020. You’re out of time.
This happens. Often.
So what should you do?
If you’re the claimant:
- Don’t let negotiations drag on indefinitely. Set internal deadlines.
- If you’re close to the limitation deadline, consider issuing protective proceedings. You can still negotiate after proceedings are on foot.
- If the other side wants more time, insist on a formal standstill agreement. This is a written agreement that both parties will not rely on the limitation period for a defined period (e.g. six months) while they negotiate. Make sure it’s signed.
- Track the limitation date in your matter management system. Make it visible to your legal team and senior management.
If you’re the defendant:
- Keep track of when the claimant’s limitation period expires. If they’re approaching the deadline and still negotiating, you may have leverage.
- Be cautious about what you say in negotiations. Don’t make statements that could be construed as acknowledgements of liability or debt unless you intend to.
- If they ask for a standstill, consider carefully. You’re giving up a potential defence. What do you get in return?
Mediation, expert determination, and dispute resolution clauses create similar issues. Many contracts require parties to mediate or engage in a dispute resolution process before commencing litigation. The limitation period doesn’t stop running during that process unless the contract or a separate agreement says it does.
If your contract has a mandatory dispute resolution clause and you’re close to the limitation deadline, you may need to issue proceedings before the dispute resolution process is complete, just to protect your position. You can then apply to stay the proceedings while the process continues.
It’s not ideal, but it’s better than losing your claim.
Standstill agreements are simple documents, but they need to be carefully drafted. Make sure they clearly state that the limitation period is suspended for the agreed period, that neither party will commence proceedings during that time (or that proceedings can be commenced but not progressed), and that the agreement can be terminated on notice. Get it in writing before you agree to extend negotiations.
What to do if you think you’re close to the deadline
You pull the contract. You check the dates. You realise you might be running out of time.
What now?
First, don’t panic. But don’t delay either. Here’s your immediate action plan:
1. Build a timeline
Map out every relevant date:
- When was the contract signed?
- When was performance due?
- When did the breach occur (or when did breaches occur if there were multiple)?
- What correspondence exists that might show acknowledgement or part payment?
- Is there anything in the contract that shortens the limitation period (notice clauses, time bars)?
You need this timeline not just for limitation purposes, but because it will form the backbone of any court documents you file.
2. Check the contract and governing law
Pull the full contract, including any schedules, annexures, and incorporated terms. Check:
- Is it a deed or a simple agreement?
- What jurisdiction’s law governs the contract?
- Are there any notice requirements or time bar clauses you haven’t complied with?
- Are there mandatory dispute resolution steps you’re required to complete before litigation?
If the contract specifies a governing law different from where you’re based, you need advice on that jurisdiction’s limitation law.
3. Secure documents and evidence now
If you’re going to issue proceedings, you’ll need evidence. Start securing it now:
- Contracts, variations, and correspondence
- Financial records, invoices, payment records
- Evidence of performance or non-performance (delivery records, inspection reports, defect lists)
- Internal communications showing knowledge of the breach
- Expert reports or assessments if they exist
Don’t wait until year six to do this. Witnesses move on. Emails get deleted. Records are archived. Evidence degrades over time.
4. Get legal advice
This isn’t a situation where you can afford to wait. If you’re within 12 months of a potential limitation deadline, you need advice now.
A litigator can:
- Confirm the applicable limitation period and when it expires
- Advise whether any extensions or exceptions apply
- Assess whether you have a viable claim
- Help you decide whether to issue proceedings immediately or whether you have time to negotiate further
- Draft and issue proceedings if required
If you’re on the other side (defending a claim), legal advice is equally critical. A limitation defence can shut down a claim before it gets to trial, but you need to raise it properly and at the right time.
5. Decide whether to issue proceedings now
If you’re very close to the deadline, the safest course is to issue proceedings. You can always continue to negotiate after proceedings are on foot. Many disputes settle after proceedings are filed.
Issuing proceedings doesn’t mean you’re abandoning commercial resolution. It just means you’re protecting your legal rights while you continue to work towards a settlement.
The alternative is risking everything on the hope that the other side will settle before time runs out. That’s a bet most experienced litigators won’t take.
If you’re defending a claim and the other side is out of time:
Your lawyer can file a defence raising the limitation period as a bar to the claim. If the facts are clear, the court will strike out the claim without a trial. It’s a powerful, often dispositive, defence.
But you need to raise it. Limitation isn’t something the court considers on its own motion. If you don’t plead it, you lose the benefit.
If you’re in-house counsel or a CFO managing a dispute, create a “dispute register” for your business. Track every potential claim, the date of breach, the applicable limitation period, and key milestones. Review it quarterly. It sounds bureaucratic, but it’s the single best way to avoid limitation disasters.
The limitation period is a hard backstop, but the practical window is shorter
Limitation periods exist to force action. They’re strict, unforgiving, and aggressively enforced by courts.
But here’s the truth most articles don’t tell you: the real window for action is almost always shorter than the statutory period.
Think about it practically.
By the time you’re in year five, evidence is stale. Witnesses have moved on. The other side will argue that your delay suggests the claim wasn’t serious. Judges notice these things. And even if you’re technically within time, the quality of your case suffers.
The businesses that handle disputes well don’t wait until year five. They act in the first 12 months. They investigate quickly. They secure evidence early. They give clear notice. They engage experts while the facts are fresh. They make deliberate decisions about whether to litigate or settle, and they execute on those decisions without drifting.
The limitation period is the legal deadline. But your practical deadline, the point at which delay starts to damage your position, is much earlier.
If you’re facing a breach, or you suspect one has occurred, don’t wait to see what happens. Don’t assume the other side will be reasonable. Don’t rely on “we’re still talking” as a strategy.
Build the timeline. Check the contract. Secure the evidence. Get advice. Make a decision.
Litigation is complex, yes. But the pathway shouldn’t be. And it starts with understanding how much time you really have.
Aptum Legal works exclusively with businesses facing commercial and tax disputes. We don’t do transactional work. We don’t handle every type of case. We litigate. That means we’ve seen every version of the limitation problem: the client who waited too long, the defendant who raised limitation and won, the complex multi-jurisdictional dispute where accrual wasn’t clear. If you’re concerned about timing, talk to someone who has run these cases and knows where the traps are. Clarity is the most powerful tool you can take into any dispute, and it starts with knowing where you stand on time.
Disclaimer: This article provides general information only and does not constitute legal advice. Limitation periods depend on the specific facts of your dispute, the terms of your contract, and the applicable legislation. You should obtain legal advice tailored to your circumstances before taking any action or making decisions about a potential claim.
