Glossary · legal

Statute of limitations SOL

Also called limitations period, time bar, limitation period.

The deadline for filing suit on a claim, running from when the claim accrued — after which even an obviously valid claim is barred, in either direction.

Drafted with AI assistance and checked by a person. Its factual claims were verified against the sources listed at the end, by Find Me Funders research desk.

What it means

Periods are set by state statute and vary by claim type and by state. Written contract claims generally run longer than oral ones; a negotiable instrument or a sale of goods under UCC Article 2 can carry its own period.

Which state's clock

Usually the one named in the governing law clause, sometimes adjusted by a borrowing statute in the forum state. This is one of the concrete reasons a choice of law clause is not decorative: a funder can select a state with a longer contract limitations period, and that choice is made before you ever see the document.

Accrual, tolling and restart

For an instalment obligation the clock may run separately on each missed payment, or from the date of acceleration, depending on state law and the terms of the note. Tolling can apply where the debtor leaves the state. And in many states a partial payment, or a written acknowledgement of the debt, restarts the period from zero.

Contractual shortening

Agreements frequently shorten the window for claims against the funder — a clause requiring any claim to be brought within one year of the event — while leaving the funder's own remedies on the statutory timetable. That asymmetry is common, deliberate, and enforceable in many states.

A judgment has its own enforcement life, typically much longer than the underlying claim and renewable. Federal and state tax collection run on their own statutes entirely.

Where this one catches people

Two ways this catches a business owner.

Making a small payment on an old debt, or signing anything that acknowledges it, can restart a period that had almost run. That is precisely why a collector working a very old account is so keen to secure "just fifty dollars today to show good faith". Before paying anything on a debt more than a few years old, or signing a payment plan for one, find out where the limitations clock stands.

Your own claims expire too, and faster than the funder's. If a funder or broker did something actionable — an unauthorised debit, a fee that was never disclosed, a misrepresentation in the sale — and the agreement shortens your window to one year, the clock is already running while you are still trying to resolve it commercially. Note the date you first knew about the problem and do not let a long, polite negotiation consume your deadline.

Where you will meet this term

Merchant Cash Advance Working Capital Term Loan Equipment Financing Invoice Financing

Read next

Arbitration clauseA contract term sending disputes to a private arbitrator instead of a court, usually alongside a jury waiver … Charge-offAn accounting decision by the creditor to stop treating a balance as collectable, which changes the creditor'… Choice of lawThe clause naming which state's law interprets the agreement, distinct from the forum clause that names where… Class action waiverThe term giving up your right to bring or join a class or collective action, so any dispute proceeds only on … CollectionsWhat a funder does to recover a defaulted balance, from internal calls and restructures through third-party a… DefaultThe condition of having broken an agreement, by missing payments or by breaching any other promise in it, whi… Demand letterA written notice from a creditor or its counsel stating the default, the amount claimed, and a deadline, usua… JudgmentA court's final determination that one party owes another a sum of money, which converts a contractual claim … Jurisdiction clauseThe provision fixing which state's law governs the contract and where any dispute must be brought — the claus… Write-offA creditor's accounting decision to stop treating a balance as collectible on its books, which does not cance…

Sources and checks

Every figure on this page traces to a document someone read, on a date. Where a check is past its review date it says so rather than passing as current.

  1. Written contract claims generally run longer than oral ones — Illinois allows ten years on written contracts definition
    "actions on bonds, promissory notes, bills of exchange, written leases, written contracts, or other evidences of indebtedness in writing...shall be commenced within 10 years next after the cause of action accrued"
    Illinois General Assembly — 735 ILCS 5/13-206 - Ten year limitation Verified against source Checked 10 Sep 2026 by Find Me Funders research desk
  2. The same state allows only five years on unwritten contracts definition
    Actions on unwritten contracts, express or implied, must be "commenced within 5 years next after the cause of action accrued."
    Illinois General Assembly — 735 ILCS 5/13-205 - Five year limitation Verified against source Checked 10 Sep 2026 by Find Me Funders research desk
  3. A sale of goods under UCC Article 2 carries its own four-year period, which the parties may shorten to not less than one year definition
    "An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued." "By the original agreement the parties may reduce the period of limitation to not less than one year but may not extend it."
    Legal Information Institute, Cornell Law School — U.C.C. § 2-725. Statute of Limitations in Contracts for Sale Verified against source Checked 10 Sep 2026 by Find Me Funders research desk
  4. A forum state’s borrowing statute can override the period that would otherwise apply to a claim accruing elsewhere definition
    "An action based upon a cause of action accruing without the state cannot be commenced after the expiration of the time limited by the laws of either the state or the place without the state where the cause of action accrued"
    New York State Senate — New York CPLR § 202 - Cause of action accruing without the state Verified against source Checked 10 Sep 2026 by Find Me Funders research desk
  5. Tolling can apply where the debtor is out of the state definition
    "If, when a cause of action accrues against a person, he is without the state, the time within which the action must be commenced shall be computed from the time he comes into or returns to the state."
    New York State Senate — New York CPLR § 207 - Defendant’s absence from state or residence und… Verified against source Checked 10 Sep 2026 by Find Me Funders research desk
  6. A written acknowledgement of a debt can restart the limitations period, and part payment is treated separately from it definition
    "An acknowledgment or promise contained in a writing signed by the party to be charged thereby is the only competent evidence of a new or continuing contract whereby to take an action out of the operation of the provisions of limitations of time for commencing actions".
    New York State Senate — New York General Obligations Law § 17-101 - Acknowledgment or new pro… Verified against source Checked 10 Sep 2026 by Find Me Funders research desk
  7. Contractual shortening of a limitations period is permitted by statute in New York definition
    "An action ... must be commenced within the time specified in this article unless a different time is prescribed by law" or "a shorter time is prescribed by written agreement"; "No court shall extend the time limited by law for the commencement of an action."
    New York State Senate — New York CPLR § 201 - Application of article Verified against source Checked 10 Sep 2026 by Find Me Funders research desk
  8. A money judgment has a far longer enforcement life than the underlying contract claim definition
    "A money judgment is presumed to be paid and satisfied after the expiration of twenty years from the time when the party recovering it was first entitled to enforce it."
    New York State Senate — New York CPLR § 211 - Actions to be commenced within twenty years Verified against source Checked 10 Sep 2026 by Find Me Funders research desk
  9. Federal tax collection runs on its own statute, not the contract limitations period definition
    Tax "may be collected by levy or by a proceeding in court, but only if the levy is made or the proceeding begun—(1) within 10 years after the assessment of the tax".
    Legal Information Institute, Cornell Law School — 26 U.S. Code § 6502 - Collection after assessment Verified against source Checked 10 Sep 2026 by Find Me Funders research desk

Statute of limitations — common questions

What does statute of limitations mean?

The deadline for filing suit on a claim, running from when the claim accrued — after which even an obviously valid claim is barred, in either direction.

Where does statute of limitations catch people out?

Two ways this catches a business owner.

Is statute of limitations the same as an interest rate?

Statute of limitations is defined above; if you are comparing it against a rate, check whether the two measures share a time dimension before you put them side by side.

Which products does statute of limitations apply to?

Merchant Cash Advance, Working Capital, Term Loan, Equipment Financing, Invoice Financing.

Is there a worked example of statute of limitations?

Not on this entry. Where a term is arithmetic, the arithmetic is shown; this one is not primarily a calculation.

What else should I read alongside statute of limitations?

Arbitration clause, Charge-off, Choice of law, Class action waiver, Collections.

Has this definition been checked?

Yes. Its claims were verified against the sources listed at the end of this page, and the reviewer is named.

Is this legal advice?

No. It is a definition. What a clause does in your contract, in your state, is a question for a lawyer licensed where you are.

Can I suggest a term?

Yes — [email protected]. The glossary grows from what people are actually shown in contracts.