What is the California statute of limitations on oral loan agreements?

California’s statute of limitations for an oral loan agreement is generally two years under Cal. Civ. Proc. Code § 339(1). An oral loan is typically treated as a contract “not founded upon an instrument of writing,” so a claim to enforce it normally must be filed within two years.[1]

Key point

General rule: If the loan agreement was oral and not memorialized in a written instrument, the limitations period is two years. Cal. Civ. Proc. Code § 339(1)[1]

Practical caveats

• If the loan is evidenced by a written promissory note or other writing, a different limitations period may apply, depending on the instrument and claim asserted.
• If the claim sounds in fraud, rescission, or another theory, a different statute of limitations may govern.
• The accrual date can matter a great deal; the clock usually starts when the cause of action accrues, which may be when repayment was due or when the lender could first sue.