On Wednesday, an Ohio Chamber of Commerce priority bill took another step closer to its passage. In the Ohio Senate Judiciary Committee, House Bill 251 (HB 251), received its second hearing in two weeks and proponents of the legislation were given the opportunity to testify.
On behalf of the Ohio Chamber, the Ohio Alliance of Civil Justice provided testimony to the committee. Under HB 251, the statute of limitation for most written contracts will shrink from eight years to six years and the statute of limitation for oral contracts will be lowered to four years.
The legislation is a priority of the Ohio Chamber and Ohio’s business community because it will reduce the amount of time employers can face liability on a contract. Reducing this liability period is important for businesses because a lawsuit alleging breach of contract can be filed regardless of how satisfactory performance may have been until the statute of limitation period is met. This prolonged risk of liability can prevent employers from making capital investments, expanding or raising wages for employees.
Likewise, lowering the statute of limitation from eight years to six years on written contracts will lead to lowering operating costs for employers since they will no longer need to keep physical and electronic documents for at least eight years.
The enactment of HB 251 will also benefit Ohio’s business and legal climate. Notably, every state in CNBC’s best states for business with a superior ranking to Ohio had a lower statute of limitation on contract period than Ohio. A shorter statute of limitation for filing breach of contract claims also promotes a common-sense civil justice system since it will reduce the frequency of litigation where the trial record is not complete due to the fading memory of witnesses or the unavailability of certain documents.
The Ohio Chamber and the Ohio Alliance of Civil Justice will continue advocating for the enactment of HB 251 because its passage will benefit all employers in the Buckeye State through a more competitive business climate and a more predictable legal system.