A common question we receive is whether a claim can still be brought after some time has passed. In Malaysia, this is governed by what is known as the limitation period. Missing this deadline can mean losing the right to pursue a claim entirely, regardless of its merits.

What is a Limitation Period?
A limitation period refers to the time limit within which a legal action must be commenced. Once this period expires, the claim is said to be “time barred”, and the court will generally not allow the claim to proceed.

In Malaysia, limitation periods are governed by the Limitation Act 1953. Under Section
6(1)(a) of the Act, actions founded on a contract or tort must generally be commenced within six (6) years from the date the cause of action accrues.
This includes, among others:

• contractual disputes; and
• civil claims arising from breaches of duty or obligations.

Section 6 also extends to other types of civil claims, including actions to enforce
recognisances, arbitral awards, and certain statutory debts, which are likewise subject to a six year limitation period unless otherwise provided.
For completeness, the Act further provides that:

• actions for accounts are also subject to a six-year limitation period; and
• actions to enforce a judgment are subject to a longer limitation period of twelve (12) years from the date the judgment becomes enforceable.

What is a Cause of Action?
A “cause of action” refers to the set of facts that gives a person the legal right to bring a
claim in court. In simple terms, it is the point in time when all the necessary elements of a claim are present, allowing legal proceedings to be commenced.

For contractual and debt-related claims, a cause of action typically arises when:

• payment becomes due and is not made; or
• there is a breach of contract or failure to perform an agreed obligation.

This is important because the limitation period under the Limitation Act 1953 begins to run from the date the cause of action accrues, not from the date of demand or reminder letters.

When Does Time Start Running?
This is often where confusion arises. Time does not start from the date a notice of demand is issued. Instead, it typically begins from the date:

• payment became due; or
• the breach of contract occurred.

In other words, sending a demand letter does not extend or reset the limitation period.

Does Part Payment Affect Limitation?
In certain circumstances, part payment of a debt may affect the limitation period. Depending on the facts, it may be treated as an acknowledgment of the debt, which can potentially restart the limitation period. However, this is highly fact-specific and should not be assumed without proper legal advice.

Practical Implications
Parties should avoid delaying action once a dispute arises. Waiting too long may result in a valid claim becoming unenforceable. From our experience, many creditors only take action after prolonged negotiations or repeated assurances of payment. By that stage, valuable time may already have been lost.

Key Takeaway
If you are owed money or believe you have a legal claim, it is important to assess the
limitation period early. Acting promptly ensures that your rights are preserved and that
appropriate legal steps can be taken in time.