Q&As

If the limitation period for bringing a claim for breach of contract has passed, but a settlement agreement was entered into prior to the expiry of the limitation period, will the settlement agreement be treated as a variation of the original contract such that it extends the initial limitation period? Does a claim for breach of a settlement agreement have its own limitation period?

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Produced in partnership with David Sawtell of 39 Essex Chambers
Published on: 25 August 2016
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A settlement agreement is a Contract in and of itself. There are two potential scenarios that arise from this question: the first where the settlement agreement was entirely contractual; the second where the settlement agreement was also embodied in a consent order.

Entirely contractual compromise

An unimpeached compromise represents the end of the dispute or disputes from which it arose (see Prudential Assurance Co Ltd v McBains Cooper [2001] 3 All ER 1014 at [19]). It is the dispute that is compromised, as opposed to the original contract itself.

It is, of course, open to the parties to expressly vary the original contract at the same time as the dispute is compromised,

David Sawtell
David Sawtell

39 Essex Chambers

David is a barrister specialising in property, commercial and chancery fields. He was called to the Bar in 2005. He is regularly instructed in complicated property, company and commercial litigation, as well as cases involving professional liability. He has particular expertise in cases involving a cross over between different areas of law or where there are allegations of dishonesty or fraud. He appears regularly in the Chancery Division and has been reported in the Court of Appeal. He is regularly published across a number of leading practitioner’s periodicals, including the Commercial Litigation Journal and the Procurement and Outsourcing Journal. He speaks regularly at seminars and conferences on commercial and civil litigation topics. He was the author of the two commercial litigation units for the Level 4 higher apprenticeships in legal services. He is a tenant at Lamb Chambers.

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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Limitation period definition
What does Limitation period mean?

The time period during which court action must begin.

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