On March 16th, Governor DeWine signed into law Senate Bill 13. The Ohio Chamber priority bill makes pro-business reforms to Ohio’s contract law by lowering the statute of limitation on written contracts from eight years to six years.
Shrinking the timeframe when liability may be imposed under a contract stands to benefit Ohio employers by giving them greater certainty about their legal risks since litigation can be commenced any time before the statutory limitation period ends regardless of how satisfactory performance under the contract may have been. Senate Bill 13 may reduce operating costs for employers who set aside reserve funds to account for the risk of litigation or who seek insurance coverage to mitigate the risk of a lawsuit.
The legislation also aims to improve the Buckeye State’s business and legal climates by fostering a predictable civil justice system. In a recent CNBC ranking of state’s business climates, Ohio held on to the 10th spot, but interestingly every state with a better ranking has a statute of limitation on written contract less than eight years. Moving our state’s limitation period from eight years to six years will make Ohio a better place to do business. At the same time, the shorter limitation period will help address Ohio’s 15th worst legal climate for lawsuit abuse by giving employers more certainty and greater predictability about their legal risks.
The Ohio Chamber commends Governor DeWine along with the Ohio Senate and Ohio House for taking quick action in support of Ohio employers by making this pro-business bill the first law enacted during the 134th General Assembly.