A Statute of Limitation is the period of time in which a party can file a lawsuit. After that period has elapsed, a party no longer has a right to sue. Different types of matters have different limitation periods.  Here are some of the limitation periods in California.

Within 2 years. Personal injury or wrongful death due to assault or negligence. [Code of Civil Procedure Sec. 335.1]

Within 4 years. An action on a contract, obligation or liability based on an instrument in writing. [CCP Sec. 337(a)]

This includes most obligations on credit cards, since the consumer probably signed an agreement to pay the amounts due. It also includes an action to recover a personal loan if the payment was made by check, since the check is an instrument in writing. 

Within 2 years. An action on a contract, obligation or liability not based on an instrument of writing [CCP Sec. 339]

Some may wonder, “What sort of contract would not be based on a written instrument?”

A contract need not be in writing to be binding. If, for example, Mary and Joe verbally agree that Mary will paint Joe’s house for $5,000, that is a contract, though not in writing. As a practical matter, it is much better to have a contract in writing, as it will be easier to prove what the parties agreed to.

Within 6 years. An action to enforce an obligation to pay a “negotiable instrument.” The 6 years runs from the due date, or if the due date is accelerated, within six years after the accelerated due date. [California Commercial Code Sec. 3118(a)]

A negotiable instrument is one that can be transferred or assigned. For example, if you borrow $10,000 from Joe, and sign a promissory note to pay $11,000 in one year (10% interest), then Joe could sell the note to Mary, and if you failed to make payment, Mary could sue you within 6 years after the note was due. 

A promissory note differs from a credit card obligation or simple loan in that it contains a promise to pay a definite amount at a certain time, and is “payable to order or bearer,” meaning that it can be transferred.