Within limits set by section 22 of the Limitations Act, 2002. It opens by declaring that a limitation period “applies despite any agreement to vary or exclude it”, then lists five exceptions. The widest — the only one permitting a period to be shortened or excluded — is available solely in a “business agreement” as the Act itself defines that term.
Key takeaways
SECTION 01 OF 08
Section 4, marginal note Basic limitation period: “Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.” The trigger is discovery, not closing.
Section 5(1) makes discovery a four-part test whose fourth part is easily missed: the claimant must have known that “a proceeding would be an appropriate means to seek to remedy it”. Section 5(2) pushes back — a claimant is “presumed to have known of the matters referred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved”. Moving that start date later is the buyer’s burden. See the discoverability rule.
Section 15 overrides that: it applies “Even if the limitation period established by any other section of this Act in respect of a claim has not expired”, and subsection (2) sets the wall at “the 15th anniversary of the day on which the act or omission on which the claim is based took place”. Where conduct repeats, subsection (6)(b) runs from “the day on which the last act or omission in the series occurs”.
It stops for concealment — subsection (4)(c)(i) reaches a defendant who “wilfully conceals from the person with the claim the fact that injury, loss or damage has occurred” — but subsection (5) is blunt: “The burden of proving that subsection (4) applies is on the person with the claim.” See how the two clocks run together.
SECTION 02 OF 08
A prohibition with exits, not a permission with conditions. Subsection (1), marginal note Limitation periods apply despite agreements: “A limitation period under this Act applies despite any agreement to vary or exclude it, subject only to the exceptions in subsections (2) to (6).” Subsection (6) defines the operative verb widely — “vary” “includes extend, shorten and suspend” — so a clause cutting time is caught as squarely as one lengthening it.
Subsection (2) grandfathers the past: a period “may be varied or excluded by an agreement made before January 1, 2004”. No live deal reaches it.
Subsection (3) runs one way only. A limitation period, “other than one established by section 15, may be suspended or extended by an agreement made on or after October 19, 2006”. Suspended or extended — not shortened, not excluded. Outside a business agreement, Ontario lets parties give each other more time and not take time away.
Subsection (4) allows the fifteen-year period to be suspended or extended “but only if the relevant claim has been discovered”, so it cannot be pushed out in advance. Subsection (5) is the wide door: “The following exceptions apply only in respect of business agreements”, and its first paragraph lets a period other than section 15’s “be varied or excluded by an agreement made on or after October 19, 2006”.
SECTION 03 OF 08
Section 22(6) defines a business agreement as “an agreement made by parties none of whom is a consumer as defined in the Consumer Protection Act, 2002”. It borrows the test. Section 1 of that Act defines a consumer as “an individual acting for personal, family or household purposes and does not include a person who is acting for business purposes”. So an individual can be party to a business agreement, and a corporation can never be a consumer.
The cross-reference is live. e-Laws records the pending substitution of the Consumer Protection Act, 2023 in section 22(6) as not in force, and the 2002 Act is stamped “This Act is repealed on a day to be named by proclamation of the Lieutenant Governor.” Both were in that state when this page was written.
SECTION 04 OF 08
In Boyce v. The Co-Operators General Insurance Company, 2013 ONCA 298 the court held that by adopting that definition “the legislature drew a bright line for the purposes of s. 22(5) between agreements entered into for ‘personal, family or household purposes’ and other agreements”, and that the question “is made solely by reference to the definition of ‘consumer’ in the Consumer Protection Act, 2002”.
A year later, in Kassburg v. Sun Life Assurance Company of Canada, 2014 ONCA 922, the court declined a literal reading: “There are therefore two requirements for a business agreement to exist: the parties must not include individuals, and the contract must not have been for personal, family or household purposes.” Reading “parties” literally was inconsistent with the objective of section 22, “which is to restrict the circumstances in which the statutory limitation periods under the Act can be altered by contract”.
Two qualifications: the Kassburg passage followed dismissal of the cross-appeal as moot, and both cases concern insurance policies, not purchase agreements. What transfers is the method — parties and purpose decide, not the label.
SECTION 05 OF 08
The motion judge in Boyce had required such a clause to name the statutory period, be unequivocal, alert the party to what it surrendered, and be signed separately. The Court of Appeal rejected all four: “Nothing in the language of s. 22 offers any support for imposing these requirements.” It added that “The only limitation in s. 22(5) is found in the definition of ‘business agreement’.”
In their place, a reading standard: “A court faced with a contractual term that purports to shorten a statutory limitation period must consider whether that provision in ‘clear language’ describes a limitation period, identifies the scope of the application of that limitation period, and excludes the operation of other limitation periods.” A survival clause silent on whether it displaces the statutory period does only part of that. See what a survival clause does.
SECTION 06 OF 08
A second mechanism sits outside section 22. In NFC Acquisition L.P. v. Centennial 2000 Inc., 2011 ONCA 43 the Court of Appeal upheld a purchase agreement read as “requiring notice of the claim within 18 months as a condition precedent to triggering the contractual right to indemnification”, and rejected the argument that section 22 struck it down: “The notice provision at issue did not vary or exclude the limitation period prescribed by the Limitations Act.”
The reasoning changes the arithmetic, not the deadline: “Once a timely notice is given, the cause of action accrued and at that point, the statutory limitation period begins to run.” The court held that “Notice provisions of this kind are acceptable in the context of commercial agreements between sophisticated parties.”
So a survival period drafted as a notice condition is not a shortened limitation period at all — it is a gate, after which the ordinary two years begin. Drafted as an outright bar on proceedings, it is a variation needing an exit inside section 22. NFC was decided under section 22 as it read before the 2006 amendments. See contractual notice deadlines and indemnity claim deadlines.
SECTION 07 OF 08
Section 11 stops both clocks where the parties “have agreed to have an independent third party resolve the claim or assist them in resolving it”: on those terms “the limitation periods established by sections 4 and 15 do not run from the date the agreement is made until” the process ends. See standstill agreements.
Section 13 restarts a clock outright for some claims — on a qualifying acknowledgment “the act or omission on which the claim is based shall be deemed to have taken place on the day on which the acknowledgment was made” — but subsection (10) requires it “in writing and signed by the person making it or the person’s agent”. See what an acknowledgment does.
Section 12(1) matters to a buyer taking assigned claims: a person claiming through a predecessor is deemed to have knowledge “on the earlier of the following” — the predecessor’s or their own. Buying a claim does not buy a fresh discovery date. Section 18 is not the indemnity provision it is taken for: it governs “a claim by one alleged wrongdoer against another for contribution and indemnity”, which Mega International Commercial Bank (Canada) v. Yung, 2018 ONCA 429 held “works with other provisions of the Limitations Act, 2002 to create a presumed start date” rather than an absolute two years.
SECTION 08 OF 08
Three rules decide whether the Act applies. Section 2(1) says “This Act applies to claims pursued in court proceedings other than” a listed set, and an arbitration clause does not escape it: section 52(1) of the Arbitration Act, 1991 provides that “The law with respect to limitation periods applies to an arbitration as if the arbitration were an action and a claim made in the arbitration were a cause of action.” A governing-law clause carries it too: section 23 states that “the limitations law of Ontario or any other jurisdiction is substantive law”.
Section 19(1) closes the gap for anyone reading the wrong statute: a period “set out in or under another Act that applies to a claim to which this Act applies is of no effect unless” the provision is listed in the Schedule.
Two neighbouring pages carry the clocks this one leaves alone: how long the CRA can come back and how long a holdback must last. Treadstone Law covers the overlaps — fraud against a lapsed survival period, misrepresentation on a business purchase, extending or shortening the period. Every provision quoted here is Ontario legislation; a deal under another province’s law answers to that province’s statute, not this one.
Only if it qualifies as a business agreement. Section 22 of the Limitations Act starts by refusing to let any agreement vary a limitation period, then opens an exception: outside a business agreement, section 22(3) lets parties suspend or extend a period, but not shorten or exclude it. Shortening is available only where none of the parties is a consumer as the Consumer Protection Act, 2002 defines that term.
Not necessarily. In NFC Acquisition v. Centennial, the Court of Appeal held that a notice-of-claim deadline drafted as a condition precedent to the indemnification right is not a variation of the limitation period at all — it is a gate, after which the ordinary two-year statutory clock begins to run once notice is given.
No. In Boyce v. The Co-Operators, the Court of Appeal rejected requirements that such a clause name the statutory period, be unequivocal, warn the party of what it surrenders, or be signed separately. The standard is only that the clause use clear language describing the limitation period, its scope, and that it excludes other limitation periods.
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