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Clause survey / Limitations period / Texas

Limitations period in Texas

The 2 rules we hold for this clause in Texas, with every authority and the sentences that state it. Nothing on this page was written by a model.

read at the 2026-10-03 barread on 2026-10-06; the reading recorded “defective”

Can the contract shorten the time the other side has to sue?

Not below two years, with one priced exception. A person may not enter a stipulation, contract or agreement that purports to limit the time in which to bring suit on that stipulation, contract or agreement to a period shorter than two years, and an agreement establishing a limitations period shorter than two years is VOID in this state. The section does not apply to an agreement relating to the sale or purchase of a business entity where a party pays or receives, or is obligated to pay or entitled to receive, consideration under it with an aggregate value of not less than $500,000.

The trap

The one-year suit-limitation clause that is routine in commercial forms elsewhere is simply void in Texas, and voiding it does not shorten anything: it restores the ordinary statutory period, which for most contract claims is the four-year residual period of § 16.051. The other shortening device has its own floor: under § 16.071 a contract stipulation requiring notice of a claim as a condition precedent to suit is void if it requires the notice within less than 90 days, and that section applies to a suit covered by it or by § 16.070. This rule is the companion to the four-year limitations rule on Tex. Civ. Prac. & Rem. Code § 16.004 and § 16.051, and answers the question that rule deliberately leaves open.

as of 2026-09-14

3 authorities

  • statuteTex. Civ. Prac. & Rem. Code § 16.070enacted 1991-08-26
    The words that state the rule
    (a) Except as provided by Subsection (b), a person may not enter a stipulation, contract, or agreement that purports to limit the time in which to bring suit on the stipulation, contract, or agreement to a period shorter than two years. A stipulation, contract, or agreement that establishes a limitations period that is shorter than two years is void in this state. (b) This section does not apply to a stipulation, contract, or agreement relating to the sale or purchase of a business entity if a party to the stipulation, contract, or agreement pays or receives or is obligated to pay or entitled to receive consideration under the stipulation, contract, or agreement having an aggregate value of not less than $500,000.
  • statuteTex. Civ. Prac. & Rem. Code § 16.051enacted 1985-09-01
    The words that state the rule
    Every action for which there is no express limitations period, except an action for the recovery of real property, must be brought not later than four years after the day the cause of action accrues.
  • statuteTex. Civ. Prac. & Rem. Code § 16.071enacted 1991-08-26
    The words that state the rule
    (a) A contract stipulation that requires a claimant to give notice of a claim for damages as a condition precedent to the right to sue on the contract is not valid unless the stipulation is reasonable. A stipulation that requires notification within less than 90 days is void. (b) If notice is required, the claimant may notify any convenient agent of the company that requires the notice. (c) A contract stipulation between the operator of a railroad, street railway, or interurban railroad and an employee or servant of the operator is void if it requires as a condition precedent to liability: (1) the employee or servant to notify the system of a claim for damages for personal injury caused by negligence; or (2) the spouse, parent, or child of a deceased employee or servant to notify the system of a claim of death caused by negligence. (d) This section applies to a contract between a federal prime contractor and a subcontractor, except that the notice period stipulated in the subcontract may be for a period not less than the period stipulated in the prime contract, minus seven days. (e) In a suit covered by this section or Section 16.070 , it is presumed that any required notice has been given unless lack of notice is specifically pleaded under oath. (f) This section does not apply to a contract relating to the sale or purchase of a business entity if a party to the contract pays or receives or is obligated to pay or receive consideration under the contract having an aggregate value of not less than $500,000.

“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.

read at the 2026-10-03 barread on 2026-10-06; the reading recorded “defective”

How long does a party have to sue on this contract in Texas?

Four years, but from one of two different sections depending on the claim. Section 16.004(a) gives four years from the day the cause of action accrues for: specific performance of a contract for the conveyance of real property; penalty or damages on the penal clause of a bond to convey real property; DEBT; fraud; and breach of fiduciary duty. Subsection (c) puts partnership-accounts settlements and an action on an open or stated account, or on a mutual and current account concerning the trade of merchandise between merchants, at four years as well, and for those the cause of action accrues on the day the dealings in which the parties were interested together cease. Separately, § 16.051 is the RESIDUAL period: every action for which there is no express limitations period, except an action for the recovery of real property, must be brought not later than four years after the day the cause of action accrues.

The trap

Read § 16.004's list again: it never uses the phrase 'breach of contract'. That is the trap, and the usual answer to it is also wrong. Texas courts most often route an ordinary breach-of-contract claim to § 16.051 rather than to 'debt' in § 16.004(a)(3) ('The four-year residual limitations period of Civil Practice and Remedies Code § 16.051 applies to a breach of contract action' (Integrated of Amarillo)) though some opinions read 'debt' broadly enough to cover it; it is an action for which Chapter 16 states no express period, which is what § 16.051 is for. Both roads end at four years, so the mistake rarely changes the number, but it changes which section you cite, and a brief that pins a services dispute to § 16.004(a)(3) is citing the debt provision for a claim the section does not name. The accrual rule for accounts is separately unusual: under § 16.004(c) it starts when the parties' dealings CEASE, not at first breach, so a running account can extend the exposure well past the individual transaction. One more number belongs in the answer, and an earlier reading of this rule said it was out of reach. Four years is the statutory period, not a floor the parties must keep: § 16.070(a) lets them shorten it by agreement but not below TWO years, and a stipulation, contract or agreement establishing a limitations period shorter than two years is void in this state. The exit § 16.070 itself gives is subsection (b). A contract for the SALE OF GOODS is on a different footing: § 2.725 sets its own four years, lets the parties reduce the period to not less than one year, and forecloses the discovery rule. A breach of warranty accrues on tender unless the warranty explicitly extends to future performance. Which statute governs a goods sale where § 16.070(a) and § 2.725(a) conflict is not answered by any authority here: an agreement relating to the sale or purchase of a business entity where a party pays or receives, or is obligated to pay or entitled to receive, consideration with an aggregate value of not less than $500,000 is outside the section, so in a big M&A deal a sub-two-year suit clause can stand.

as of 2026-09-14

6 authorities

  • statuteTex. Civ. Prac. & Rem. Code § 16.004enacted 1999-08-30
    The words that state the rule
    (a) A person must bring suit on the following actions not later than four years after the day the cause of action accrues: (1) specific performance of a contract for the conveyance of real property; (2) penalty or damages on the penal clause of a bond to convey real property; (3) debt; (4) fraud; or (5) breach of fiduciary duty.
  • statuteTex. Civ. Prac. & Rem. Code § 16.051enactment date not established
    The words that state the rule
    Every action for which there is no express limitations period, except an action for the recovery of real property, must be brought not later than four years after the day the cause of action accrues.
  • statuteTex. Civ. Prac. & Rem. Code § 16.004enactment date not established
    The words that state the rule
    (c) A person must bring suit against his partner for a settlement of partnership accounts, and must bring an action on an open or stated account, or on a mutual and current account concerning the trade of merchandise between merchants or their agents or factors, not later than four years after the day that the cause of action accrues. For purposes of this subsection, the cause of action accrues on the day that the dealings in which the parties were interested together cease.
  • statuteTex. Civ. Prac. & Rem. Code § 16.070enactment date not established
    The words that state the rule
    (a) Except as provided by Subsection (b), a person may not enter a stipulation, contract, or agreement that purports to limit the time in which to bring suit on the stipulation, contract, or agreement to a period shorter than two years. A stipulation, contract, or agreement that establishes a limitations period that is shorter than two years is void in this state. (b) This section does not apply to a stipulation, contract, or agreement relating to the sale or purchase of a business entity if a party to the stipulation, contract, or agreement pays or receives or is obligated to pay or entitled to receive consideration under the stipulation, contract, or agreement having an aggregate value of not less than $500,000.
  • statuteTex. Bus. & Com. Code § 2.725enacted 1967-09-01
    The words that state the rule
    (a) 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. (b) A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered.
  • caseNo. 07-11-0422-CV (Tex. App.—Amarillo Apr. 2, 2013)Integrated of Amarillo, Inc. v. Pinkston-Hollar Construction Services, Inc.Tex. App.—Amarillodecided 2013
    The words that state the rule
    The four-year residual limitations period of Civil Practice and Remedies Code § 16.051 applies to a breach of contract action.

“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.

The same clause elsewhere

27 other states we answer limitations period for. Read them side by side in the survey.