Change To Restriction On Contracting Out Of Limitation Periods


As of October 19, 2006 an amendment has been made to theLimitations Act, 2002, which loosens the restrictions on contracting out of limitation periods. When the originalLimitations Act, 2002came into effect January 1, 2004, it specifically provided that you could not contract out of a limitation period. A number of concerns were raised with this restriction resulting in the amendment made last fall by virtue of theAccess to Justice Act, 2006. 
Now, there are several stated exceptions to the no contracting out rule. A limitation period under the Act, other than the ultimate limitation period of 15 years, can be suspended or extended by an agreement made on or after October 19, 2006. The ultimate limitation period of 15 years can only be suspended or extended by virtue of an agreement made on or after October 1, 2006 if the claim has been discovered. 
The amendments also permit parties to a 'business agreement"? on or after October 19, 2006 to shorten limitation periods. As well, it would appear that, although the ultimate limitation period of 15 years can be shortened, commercial parties cannot do away with entirely. (These two items do not apply to agreements made by a consumer, as defined in theConsumer Protection Act, 2002).
Click here for a link to the amendedLimitations Act, 2002.

Archives