What is the time limit to sue for misrepresentation after buying a business?

There is no single national deadline. Each province sets its own limitation law, and for a misrepresentation claim the clock usually starts when you discovered the problem, not on closing day. Buyers lose claims in two ways: they wait while they investigate, or they overlook that the purchase agreement set a timetable of its own.

How the basic period is counted

Ontario, British Columbia and Alberta all use a discovery-based clock. Ontario’s Limitations Act, 2002 counts from the day the claim was discovered, which is the earlier of the day you knew the relevant facts and the day a reasonable person in your position ought to have known them. British Columbia’s Limitation Act asks when you first knew or reasonably ought to have known, and Alberta’s Limitations Act uses a similar knowledge test. Each statute fixes the length itself, so read the Act for your province rather than trusting a figure from an article.

The longer outer limit

Each statute also sets a longer outer limit that runs whether or not you have discovered anything. Ontario counts it from the act or omission behind the claim and bars proceedings after it, Alberta counts from when the claim arose, and British Columbia has its own ultimate limitation period. Each Act has exceptions too, so an unusual set of facts, such as a concealed problem, is one to put in front of a lawyer early.

What your purchase agreement can change

Ontario’s Act lets the parties to a business agreement vary or exclude the basic period and vary the outer limit, which can be suspended or extended by agreement only once the claim has been discovered, while Quebec’s Civil Code says no prescriptive period other than the one the law provides may be agreed. So the purchase agreement is the first document to read once you suspect a problem. Look for how long the seller’s statements survive after closing and how, and by when, you must give notice. Our pages on what happens if the seller lied and what a purchase agreement should contain cover the clauses involved.