Limitation Period for Continuing Breach of Contract Claims

A continuing breach of contract arises where a party remains in breach over a period of time, rather than committing a single, one-off failure. These types of disputes are common in commercial contracts involving ongoing obligations such as supply agreements, service contracts, confidentiality duties, restrictive covenants, and payment schedules.

The key legal issue is how limitation periods apply when a breach is not a single event. In England and Wales, limitation is governed primarily by the Limitation Act 1980, which sets strict time limits for bringing contractual claims. The challenge in continuing breach cases is determining when time starts running and whether each breach creates a new limitation period.

Legal Framework: Limitation in Contract Claims

Most contractual claims are governed by:

• Section 5 Limitation Act 1980: six-year limitation period for actions founded on simple contract
• Section 8 Limitation Act 1980: twelve-year limitation period for deeds

The limitation period runs from the date the cause of action accrues, meaning when the breach occurs and the claimant first has a right to sue.

In continuing breach cases, identifying the “date of breach” is often complex because the breach may repeat or persist over time.

What Is a Continuing Breach of Contract?

A continuing breach occurs where:

• The contractual obligation requires ongoing performance, and
• The breach persists over time rather than occurring once

Typical examples include:

• Failure to make ongoing payments under a contract
• Continuous failure to maintain insurance or regulatory compliance
• Ongoing breaches of confidentiality obligations
• Breach of non-compete or restrictive covenants
• Failure to provide services over a contractual period

The legal distinction between a continuing breach and a one-off breach with continuing consequences is critical for limitation purposes.

Continuing Breach vs One-Off Breach with Continuing Effects

Courts distinguish between two scenarios:

1. Continuing breach (fresh breach each day or period)

In a continuing breach:

• Each day or each repeated failure constitutes a new breach
• A new limitation period runs for each individual breach

Example:

• A contract requires monthly payments
• Each missed payment creates a separate cause of action
• Each payment has its own six-year limitation period

2. One-off breach with continuing consequences

In this scenario:

• The breach happens once
• The consequences continue, but no new breaches occur

Example:

• Wrongful termination of a contract
• Failure to deliver goods on a specific date

In these cases:

• Limitation runs from the original breach date only
• The continuing impact does not restart or extend limitation

When Does Time Start Running?

The limitation period begins when the cause of action accrues.

For continuing breach claims, this depends on the nature of the obligation:

Ongoing contractual obligations

• Each failure may trigger a new limitation period
• Time runs separately for each breach event

Single breach with ongoing consequences

• Time runs from the original breach only
• No fresh limitation period arises

Key Legal Principles in Continuing Breach Cases

1. Separate actionable breaches

Where obligations are repeated (e.g. monthly payments or continuous duties), courts often treat each failure as independently actionable.

This means:

• Older breaches may become time-barred
• More recent breaches may still be enforceable

2. No extension due to ongoing harm

The fact that damage continues does not automatically extend limitation.

The courts focus on:

• The date of breach
• Not the duration of harm or loss suffered

3. Accrual of multiple causes of action

In continuing breach cases:

• Each breach creates a separate cause of action
• Each cause of action has its own limitation period

This is particularly relevant in commercial contracts involving instalments or recurring obligations.

4. Fraud or concealment exceptions

Under Section 32 Limitation Act 1980, limitation may be postponed where:

• There is deliberate concealment of facts
• The claimant could not reasonably discover the breach

This rule may affect when time starts running in complex continuing breach scenarios.

Common Commercial Examples

1. Instalment payment contracts

• Each missed instalment is a separate breach
• Limitation runs individually for each payment date

2. Supply and service agreements

• Failure to deliver services over time
• Each missed service period may be a separate breach

3. Restrictive covenants and non-compete clauses

• Each day of non-compliance may be treated as a fresh breach
• Limitation may run continuously for the duration of the breach

4. Confidentiality obligations

• Each disclosure of confidential information may be a separate breach
• Continuing disclosure may create multiple limitation periods

Litigation Impact of Continuing Breaches

Continuing breach claims significantly affect litigation strategy:

For claimants

• Older breaches may be irrecoverable due to limitation
• Claims should focus on the most recent actionable breaches
• Evidence must clearly identify breach dates

For defendants

• Limitation can significantly reduce exposure
• Historic breaches may be time-barred
• Defence may require detailed timeline analysis

Partial Claims and Split Limitation Periods

In continuing breach cases, courts may allow:

• Recovery of damages for breaches within the limitation period
• Exclusion of earlier breaches that are time-barred

This results in:

• “Split claims” covering different time periods
• Reduced recoverable damages in long-running disputes

Practical Issues in Determining Limitation

1. Identifying the breach structure

The key question is whether the contract creates:

• A continuous obligation, or
• Separate, periodic obligations

2. Documenting breach dates

Accurate records are essential to:

• Establish when each breach occurred
• Determine which claims remain in time

3. Risk of misclassification

Incorrectly treating a one-off breach as continuing (or vice versa) may lead to:

• Claims being struck out as time-barred
• Loss of recoverable damages

Common Questions from our Readers

Does a continuing breach reset the limitation period?

No. It does not reset a single period, but each new breach may create its own limitation period.

Can you claim for breaches older than six years?

Generally not, unless an exception applies. Older breaches are usually time-barred under the Limitation Act 1980.

Does ongoing damage extend limitation?

No. Limitation is based on breach date, not ongoing loss.

What is the most important distinction in these cases?

The key distinction is between:

• Continuing breaches (fresh causes of action), and
• One-off breaches with continuing consequences (single cause of action)

Key Takeaways

Continuing breach of contract claims create complex limitation issues under the Limitation Act 1980. In most commercial contracts, each repeated failure or ongoing breach may generate a new six-year limitation period. However, where a breach is a single event with continuing consequences, the limitation period runs only from the original breach date. Correctly identifying the nature of the breach is essential, as it directly affects whether a claim can be brought and how much compensation may be recovered.