CCP 339 Statute of Limitations: Covered Claims, Accrual, and Tolling

Under California Code of Civil Procedure Section 339, the statute of limitations is two years for lawsuits on oral or otherwise unwritten contracts, certain title insurance claims, actions against sheriffs and coroners acting in their official capacity, and rescission of unwritten contracts.¹ The clock generally starts on the date of the breach or injury, with delayed-discovery and tolling rules that can push it later.

If your agreement was never reduced to a signed writing, this is almost always the statute that controls how long you have to sue.

What Claims Fall Under the Two-Year Rule

The statute’s first subdivision reaches “an action upon a contract, obligation or liability not founded upon an instrument of writing,” plus actions on a policy of title insurance or a certificate, abstract, or guaranty of title to real property.¹ The second subdivision covers acts or omissions by a sheriff or coroner in their official capacity, including the failure to pay over money collected to enforce a judgment.² The third subdivision governs rescission of an unwritten contract.

Beyond the statute’s text, California courts have placed several familiar causes of action inside the two-year window:

Oral and Implied-in-Fact Contracts

Handshake business deals, verbal employment promises, and undocumented personal loans are the core cases. Implied-in-fact contracts fall here too, including Foley-style implied employment contracts and oral assurances made during recruitment or annual reviews.³

Promissory Estoppel

A promissory estoppel claim based on an oral promise is treated as an obligation not founded on a writing, so the two-year period applies.¹

Negligent Misrepresentation

Although negligent misrepresentation is often grouped with fraud, California courts apply CCP 339’s two-year period rather than the three-year fraud statute in CCP 338(d), reasoning that the core of the claim is negligence rather than intentional deceit.⁴

Insurance Bad Faith

Breach of the implied covenant of good faith and fair dealing against an insurer is governed by CCP 339. In Gourley v. State Farm Mutual Automobile Insurance Co., the California Supreme Court explained that bad faith actions recover for tortious interference with a property right rather than personal injury, and cited Richardson v. Allstate Insurance Co. for placing such claims under CCP 339, subdivision 1.⁵

Legal Malpractice

In Alter v. Michael, the California Supreme Court held that attorney professional negligence actions fall under CCP 339’s two-year period rather than the one-year malpractice statute in CCP 340, noting California courts had “uniformly declared” this rule.⁶

What CCP 339 Does Not Cover

Several claims that look like they belong here are routed elsewhere, and misreading the boundary is a common way to miss a deadline on the other side.

Sale of goods. CCP 339 defers to California Commercial Code Section 2725, which sets a four-year period for breach of a sales contract. Under Section 2725, the cause of action accrues when the breach occurs regardless of the buyer’s knowledge, except where a warranty explicitly extends to future performance of the goods.⁷ The California Courts self-help site confirms sale-of-goods disputes follow Section 2725, not CCP 339.⁸

Book accounts and accounts stated. These are governed by CCP 337’s four-year written-contract period. Only “simple” or “ordinary” accounts that do not qualify as book accounts or mutual open accounts remain under the two-year rule.⁹

Partnership accounting and fiduciary duty. In Manok v. Fishman, the Court of Appeal held that an action for an accounting between partners is governed by the four-year catch-all in CCP 343, even when the partnership itself rests on an oral agreement, because the right being enforced is the fiduciary duty to account.¹⁰ Breach of fiduciary duty claims more broadly carry CCP 343’s four-year period.¹¹

When the Clock Starts

A limitations period in California generally begins when the cause of action “accrues,” meaning the moment all elements of the claim exist and you have the legal right to sue.¹² For a straightforward breach of an oral contract, that is usually the date the other party failed to perform.

CCP 339 writes in two delayed-accrual rules of its own. Title insurance and real property title guaranty claims do not accrue “until the discovery of the loss or damage suffered by the aggrieved party.”¹ Rescission of an unwritten contract runs from the facts giving rise to the right of rescission, but when fraud or mistake is the basis, the period does not start until you actually discover those facts.²

California courts also recognize a broader delayed-discovery doctrine that can apply to other CCP 339 claims. The limitations period does not begin until you knew or reasonably should have known about the injury and its cause, measured by when a “reasonably diligent person would have uncovered the wrongdoing.” The plaintiff carries the burden of explaining why suit was not filed sooner.¹³

Tolling That Can Extend the Two Years

Several doctrines can pause or extend the deadline. They apply across California’s limitations statutes, not just this one.

Minority or incapacity under CCP 352 pauses the clock while the plaintiff is under 18 or mentally incompetent.¹³
Absence of the defendant from California under CCP 351 can toll the period while they cannot be served.¹³
Imprisonment under CCP 352.1 allows up to two years of tolling for an incarcerated plaintiff.¹⁴
A bankruptcy automatic stay halts suits and the stay period does not count against the plaintiff.¹³
A pending class action covering the same subject may toll individual claims, particularly if the class is later decertified.¹⁴

Equitable estoppel is a separate route. If the defendant actively concealed the wrongdoing, a court can bar them from using the statute of limitations as a defense. The California Supreme Court applied this in Bernson v. Browning-Ferris Industries of California, Inc., holding that a defendant who intentionally conceals their identity may be estopped from asserting a limitations defense.¹⁴

What Happens If You File Late

Once the two years have run, the defendant can raise the expired statute of limitations as an affirmative defense or as grounds for a demurrer arguing the complaint fails as a matter of law. If the defense is established, the court must dismiss the case and has no discretion to extend the period on its own.¹²

A Companion Statute for Oral Leases

CCP 339.5 handles oral leases of real property. It sets a two-year limitations period for claims under Civil Code Section 1951.2, with the clock starting at whichever comes first: the breach of the lease and abandonment of the property, or the termination of the tenant’s right to possession.¹⁵ If your dispute involves an unwritten rental arrangement rather than a general oral contract, this is the provision to check first.

1
Justia Law. California Code of Civil Procedure Section 339
2
FindLaw. California Code of Civil Procedure Section 339
3
1000Attorneys.com. California Wrongful Termination Statute of Limitations
4
Plaintiff Magazine. Don’t Let the SOL Leave You and Your Client SOL
5
Justia Law. Gourley v. State Farm Mutual Automobile Insurance Co.
6
Stanford Law School Supreme Court of California Resources. Alter v. Michael
7
Justia Law. California Commercial Code Section 2725
8
California Courts. Statute of Limitations
9
UC Berkeley Law Library. California Accounts and Book Accounts
10
Justia Law. Manok v. Fishman
11
Sacramento Attorneys. Claiming Damages for Breach of Fiduciary Duty
12
Sacramento County Public Law Library. Statutes of Limitations
13
CEB. Understanding the Statute of Limitations in California Civil Cases
14
Advocate Magazine. Unwinding the Statute of Limitations Clock
15
Justia Law. California Code of Civil Procedure Section 339.5