The Ohio Senate today unanimously passed Senate Bill 13 (SB 13) – legislation that will improve the state’s business and legal climates by reforming Ohio’s contract laws. The bill, sponsored by Senator George Lang, mirrors House Bill 251 from the prior General Assembly which passed the Ohio House and Senate with broad bi-partisan support but failed to get across the finish line during the final days of the lame duck session.
Under the bill, Ohio’s statute of limitation on written contracts will move from eight years to six years, and the limitation period for oral contracts will move from six years to four years. This reduction will have numerous benefits for Ohio employers including lower operating costs and greater certainty about their legal obligations which helps employers in the Buckeye State grow their business and compete with other companies across the country.
Likewise, SB 13 promotes a better legal climate in the state by providing employers greater certainty about their legal obligations. In a contract, all parties retain the right to commence litigation throughout the statutory period regardless of how satisfactory performance may have been. This uncertainty of litigation must be taken into account by setting aside money in reserve or by seeking insurance coverage to mitigate the risk of liability throughout the time period when a lawsuit can be filed. Enacting the lower statute of limitation as proposed by Senate Bill 13 addresses that problem and will help employers have the cash available to expand their business or hire employees which helps Ohioans and our economy prosper.
The Ohio Chamber commends the Ohio Senate for the quick action on this bill, and we look forward to working with lawmakers in the House to continue swiftly moving the bill through the legislative process.