Statute of Limitations

statute describing the limitations on how many years can pass before someone gives up their right to sue for a wrongful action. For example, the Internal Revenue Service has up to three years to assess back taxes from the time the return is filed, unless tax fraud is charged. Most states impose a statute of limitations of six years to challenge the violation of a written contract. Therefore, a suit claiming damages filed seven years after the alleged contract violation would be thrown out of court because the statute of limitations had run out.