In Connecticut, the statute of limitations for Promissory Notes can be
found in Connecticut General Statutes 42a-3-118. Also, the statute
applies to Promissory Notes associated with mortgages.
Connecticut General Statutes 42a-3-118 Statute of limitations
(a) Except as provided in subsection (e), an action to enforce the obligation of a party to pay a note payable at a definite time must be commenced within six years after the due date or dates stated in the note or, if a due date is accelerated, within six years after the accelerated due date
(b) Except as provided in subsection (d) or (e), if demand for payment is made to the maker of a note payable on demand, an action to enforce the obligation of a party to pay the note must be commenced within six years after the demand. If no demand for payment is made to the maker, an action to enforce the note is barred if neither principal nor interest on the note has been paid for a continuous period of ten years
(c) Except as provided in subsection (d), an action to enforce the obligation of a party to an unaccepted draft to pay the draft must be commenced within three years after dishonor of the draft or ten years after the date of the draft, whichever period expires first.
(d) An action to enforce the obligation of the acceptor of a certified check or the issuer of a tellers check, cashiers check, or travelers check must be commenced within three years after demand for payment is made to the acceptor or issuer, as the case may be.
(e) An action to enforce the obligation of a party to a certificate of deposit to pay the instrument must be commenced within six years after demand for payment is made to the maker, but if the instrument states a due date and the maker is not required to pay before that date, the six-year period begins when a demand for payment is in effect and the due date has passed.
(f) An action to enforce the obligation of a party to pay an accepted draft, other than a certified check, must be commenced (i) within six years after the due date or dates stated in the draft or acceptance if the obligation of the acceptor is payable at a definite time, or (ii) within six years after the date of the acceptance if the obligation of the acceptor is payable on demand.
(g) Unless governed by other law regarding claims for indemnity or contribution, an action (i) for conversion of an instrument, for money had and received, or like action based on conversion, (ii) for breach of warranty, or (iii) to enforce an obligation, duty, or right arising under this article and not governed by this section must be commenced within three years after the cause of action accrues.
The major case in this area is Fleet National Bank v. Lahm. 86 Conn. App
In Fleet National Bank v. Lahm
The note provided that in the event an installment payment is not made
when due, “the entire indebtedness with accrued interest due thereon
under this Note, shall, at the option of lender, accelerate and become due
and payable without demand or notice of any kind.” Emphasis added.
The note in this case was not payable at the will of the plaintiff, but,
rather, at the option of the plaintiff only if an installment payment was not
made when due and the plaintiff exercised Â its option to demand
payment. (Therefore the note was not a demand note). Emphasis Added.
CGS 42a-3-118(a) applies because the note was payable at a definite time
rather than on demand. Although a debtor may be in default on one
installment, other installments lie in the future. “The fact that a cause of
action may have accrued with respect to an installment in
default does not necessarily mean that a cause of action has also accrued
against future installments that are not even due.” Id. When acceleration
of the total unpaid debt is optional on the part of the holder of a note, and
the holder has given no indication to the debtor that the entire balance is
presently due, the cause of action does not accrue until that balance is due
pursuant to the particular note or the holder has notified the debtor of an
The result of Fleet National Bank v Lahm can be summarized as follows
- If there is a Promissory Note which provides for installment payments over a period of years, and the Note provides for an option to accelerate, the statute of limitations does not start until the end of the term of the Note, or acceleration by the Note Holder, whichever occurs first.
Example: 20 year promissory Note â€“ Signed on 1/1/2006, with final
payment on 12/1/2025.
Assuming there is an option to accelerate, and any defaults
- If no acceleration by Note Holder, the statute of limitations doesn’t start until the due date of 12/1/2025. See CGS 421-3-118
- If there is acceleration, the statute of limitations starts on the date of acceleration.
Connecticut General Statutes 42a-3-118(b) applies to demand notes.
General Statutes 42a-3-108(a) provides: “A promise or order is `payable on demand’ if it states that it is payable on demand or at sight, or otherwise indicates that it is payable at the will of the holder, or …. does not state any time of payment.”
For demand notes, the statute of limitations is as follows:
- If there is a demand for payment, 6 years from the date of demand. CGS 42a-3-118(b)
- If there is no demand for payment, 10 years from the date neither principal nor interest has been paid. Id
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