California Code of Civil Procedure 337 gives you four years to file a lawsuit based on a written contract. That same four-year window covers book accounts, accounts stated, and rescission of a written agreement. Tucked into the same statute is a much shorter deadline — three months — for one specific situation involving foreclosure sales. Knowing which part of the statute applies to your dispute, and when its clock actually started, is the difference between a live claim and a lost one.1California Legislative Information. California Code of Civil Procedure 337 – Time of Commencing Actions
What CCP 337 Covers
The statute contains three separate categories, each carrying its own four-year limit.
Subsection (a) covers any action on a contract, obligation, or liability founded on a written instrument. This is the broad category. It reaches commercial leases, employment contracts, promissory notes, construction agreements, service contracts, loan documents, and real estate deals — anything where the obligation rests on a written document.
Subsection (b) covers book accounts and accounts stated based on written records, along with the balance due on a mutual open account with written entries. A book account is a running ledger of transactions. When the account has more than one item, the four years runs from the date of the last entry rather than the first.
Subsection (c) covers actions based on rescission of a written contract. Rescission cancels the agreement and unwinds the exchange. The four-year period runs from when the facts giving the right to rescind occurred, and when rescission is based on fraud or mistake, the clock does not start until the fraud or mistake is discovered.1California Legislative Information. California Code of Civil Procedure 337 – Time of Commencing Actions
When the Four-Year Clock Starts
Under subsection (a), the clock begins on the date of the breach itself. If a contractor was supposed to finish by March 1 and did not, the clock started March 1. If a borrower missed a payment due June 15, the clock for that missed payment started June 15.
Recurring obligations create separate accrual dates. When a contract requires monthly or periodic payments, each missed payment starts its own four-year window. You do not lose the right to sue over a payment missed two years ago simply because the first missed payment happened five years ago. Each breach is its own starting point.
Under subsection (b), a single-item account starts the clock on the date of that item. A multi-item account starts the clock on the date of the last entry, which can meaningfully extend how far back the running balance reaches.
Under subsection (c), the clock starts when the facts giving rise to rescission occurred, not when the contract was signed. For fraud or mistake, discovery controls. The discovery rule is written directly into the subsection, so you do not have to reach for a separate tolling doctrine to make it work.
The Three-Month Foreclosure Deadline
Subsection (a) contains a rule that catches many borrowers and lenders off guard. When a deed of trust or mortgage with a power of sale secures a debt, and the lender exercises that power of sale, any action to recover a deficiency judgment for the remaining balance must be filed within three months of the foreclosure sale.1California Legislative Information. California Code of Civil Procedure 337 – Time of Commencing Actions
Not four years. Three months. If the sale price does not cover the loan balance, the lender has 90 days to sue for the difference. Miss the window and the claim is gone. For borrowers, a foreclosure that seemed to close the matter can still produce a lawsuit, but only if the lender moves fast.
What CCP 337 Does Not Cover
The statute is written for written agreements. Several nearby situations look similar but run on different timelines.
Oral Contracts
Oral contracts fall under CCP 339, which sets a two-year limit for obligations not founded on a written document.2California Legislative Information. California Code of Civil Procedure 339 The window is half as long. CCP 339 also covers rescission of oral contracts, with the same discovery-rule protection for fraud and mistake that CCP 337(c) provides.
Sale of Goods
Contracts for the sale of goods run on California Commercial Code Section 2725, the state’s version of UCC 2-725. The limit is four years, matching CCP 337, but the accrual rule is stricter: the clock starts when the breach happens, whether or not you knew about it. Buy equipment with a hidden defect and the four years begins at delivery, not when the defect surfaces. The exception is a warranty that explicitly extends to future performance, where discovery controls. Parties can agree to shorten the period to as little as one year, but they cannot extend it past four.3Justia Law. California Commercial Code 2701-2725
Construction Latent Defects
CCP 337.15 sets a 10-year outer limit for latent defects in the design, planning, or construction of a real property improvement. A latent defect is one that a reasonable inspection would not reveal. You still have to file within four years of discovering the defect under CCP 337, but no matter when you discover it, the absolute deadline is 10 years after substantial completion of the project. Substantial completion is measured from the earliest of final inspection by a public agency, recording of a notice of completion, occupancy, or one year after work stopped.4California Legislative Information. California Code of Civil Procedure 337.15
Events That Can Pause the Clock
Several doctrines can stop the four-year period from running. They do not lengthen the statute; they suspend it while certain things happen.
Equitable Tolling
California courts developed equitable tolling to prevent unfair results when a plaintiff is actively pursuing the same dispute through another channel. If you file a workers’ compensation claim, an administrative complaint, or another proceeding that addresses the same underlying issue, the limitations period on your contract claim may pause while that proceeding is pending. The defendant must have received timely notice of the claim through the other proceeding.5Justia. CACI No. 457 – Statute of Limitations – Equitable Tolling – Other Prior Proceeding
Defendant Out of State
Under CCP 351, if the person you need to sue is outside California when the claim arises, the limitation period does not start until they return. If they leave the state after the claim arises, the time they are absent does not count against the deadline. Long-arm jurisdiction has reduced how often this matters in practice, but the rule remains on the books.
Fraud Discovery Under a Separate Statute
CCP 338(d) sets a three-year period for claims based on fraud or mistake, running from the date of discovery. A breach caused by fraudulent conduct can give rise to both a contract claim, which runs four years under CCP 337, and a standalone fraud claim, which runs three years from discovery under CCP 338(d).6California Legislative Information. California Code of Civil Procedure 338 For rescission of a written contract based on fraud, the discovery rule inside CCP 337(c) already handles the timing.
Protecting the Deadline
Four years sounds generous, and it usually is not. Demand letters, negotiations, and informal resolution attempts do not stop the clock unless you are pursuing a formal alternative remedy that qualifies for equitable tolling. Identify which statute governs your dispute before you plan around any deadline: a verbal promise runs on CCP 339’s two years, a defective product may run on Commercial Code 2725, and a latent construction defect has both the four-year discovery deadline and the 10-year outer wall of CCP 337.15. Calculating from the wrong statute produces the wrong deadline, and by the time the mistake surfaces, the real one may have already passed.