How long do we have to sue on this contract, and when does the clock start?
Six years, running from the breach. The Supreme Court of Wisconsin described Wis. Stat. § 893.43 as Wisconsin's six-year statute of limitations for contract actions and held that under that section a contract cause of action accrues at the moment the contract is breached, regardless of whether the injured party knew or should have known that the breach occurred (CLL Associates). The court recorded that this holding rests on a 90-year line of precedent.
The trap
There is no discovery rule for contract claims in Wisconsin, which is the opposite of the default many drafters assume: a latent defect or a quiet breach can run the period out before anyone could have found it, and a warranty or audit-rights clause that assumes the clock starts on discovery does not change the statute. The six-year period comes to this rule through CLL Associates, which sets § 893.43 out in full: an action upon any contract, obligation or liability, express or implied, including an action to recover fees for professional services, must be commenced within 6 years after the cause of action accrues or be barred, and § 893.43(2) sets a different three-year period for an action upon a motor vehicle insurance policy described in s. 632.32(1). Note too that § 893.43 is the general provision: the court emphasised that it applies to contracts in general rather than to one distinct type of transaction, and pointed to the Uniform Commercial Code's own limitation for sales contracts in § 402.725(2), whose period is not stated here. A contract for the sale of goods is not on this clock. Nothing here addresses whether a contract may shorten the period.
9 authorities
- case174 Wis.2d 604CLL Associates Ltd. Partnership v. Arrowhead Pacific Corp.Wis.decided 1993read it at the source ↗
The words that state the rule
We hold that under sec. 893.43, a contract cause of action accrues at the moment the contract is breached, regardless of whether the injured party knew or should have known that the breach occurred.
- case174 Wis.2d 604CLL Associates Ltd. Partnership v. Arrowhead Pacific Corp.Wis.decided 1993read it at the source ↗
The words that state the rule
There is one issue presented in this case. When does a contract cause of action "accrue," as that term is used in sec. 893.43, Stats., 1 Wisconsin's six-year statute of limitations for contract actions?
- case174 Wis.2d 604CLL Associates Ltd. Partnership v. Arrowhead Pacific Corp.Wis.decided 1993read it at the source ↗
The words that state the rule
In Wisconsin, a 90-year line of precedent holds that " [i]n an action for breach of contract, the cause of action accrues and the statute of limitations begins to run from the moment the breach occurs. This is true whether or not the facts of, the breach are known by the party having the right to the action." State v. Holland Plastics Co., 111 Wis. 2d 497, 506 , 331 N.W.2d 320 (1983) (citations omitted)
- statuteWis. Stat. § 893.43enactment date not established
The words that state the rule
An action upon a motor vehicle insurance policy described in s. 632.32 (1) shall be commenced within 3 years after the cause of action accrues or be barred.
- case174 Wis.2d 604CLL Associates Ltd. Partnership v. Arrowhead Pacific Corp.Wis.decided 1993read it at the source ↗
The words that state the rule
Section 893.43, Stats., provides as follows: Action on contract. An action upon any contract, obligation or liability, express or implied, including an action to recover fees for professional services, except those mentioned in s. 893.40, shall be commenced within 6 years after the cause of action accrues or be barred.
- case174 Wis.2d 604CLL Associates Ltd. Partnership v. Arrowhead Pacific Corp.Wis.decided 1993read it at the source ↗
The words that state the rule
However, it must be emphasized that sec. 893.43, Stats., applies to contracts in general, as opposed to one distinct type of transaction.
- case174 Wis.2d 604CLL Associates Ltd. Partnership v. Arrowhead Pacific Corp.Wis.decided 1993read it at the source ↗
The words that state the rule
The widely adopted Uniform Commercial Code creates a statute of limitations for sales contracts which runs from the time of breach, regardless of when discovery occurs. Wisconsin's version of this law, codified in sec. 402.725(2), Stats. 1991-92, contains the recommended language of the uniform act: "A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach."
- case174 Wis.2d 604CLL Associates Ltd. Partnership v. Arrowhead Pacific Corp.Wis.decided 1993read it at the source ↗
The words that state the rule
We recognize that a contract breach may sometimes be latent and, in practical terms, undetectable.
- case174 Wis.2d 604CLL Associates Ltd. Partnership v. Arrowhead Pacific Corp.Wis.decided 1993read it at the source ↗
The words that state the rule
For the foregoing reasons, we decline to apply the discovery rule to sec. 893.43, Stats. Under that section, a cause of action accrues at the time the contract is breached, regardless of whether the injured party knew or should have known that the breach occurred. By the Court. — The judgment of the Dane county circuit court is affirmed.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.