Time bars aren’t just legal red tape—they’re deal-breakers.
Ignore them, and your right to claim might vanish faster than you think.
Take the Sahara Energy case. A $101 million claim went up in smoke because time ran out. Settlement talks didn’t stop the clock, and the courts didn’t hesitate to throw the case out.
If you’re a UK company operating in the Bahamas, this article is your wake-up call. Here you’ll learn:
Why understanding limitation periods is non-negotiable in contract disputes.
How to draft bulletproof contracts that protect your claims.
What to do during settlement talks to avoid running out of time.
Because in business, missing the deadline can mean losing everything.
Ready to make time work for you? Let’s get into it.
What is a Time Bar?
A time bar is essentially a deadline on your legal rights. If you don’t act within the specified time, you lose the chance to make a claim and pursue compensation.
For example, suppose a UK-based company ships construction materials to a Bahamian developer. But when the shipment arrives, the materials are defective, causing major delays in the developer’s project.
If their contract includes a clause requiring disputes to be raised within 30 days, and the UK company misses that window, they could lose their right to claim damages. That means no compensation for lost revenue or the cost of replacing the materials—regardless of how serious the issue is.
Legal Framework Surrounding Time Bars
Time bars are strict and are often outlined either in statutory laws or contracts.
To understand how these two sources define time bars and interact with one another, keep reading:
Time Bar Defined By Law
If a time bar is defined by law, it is known as the Statutory time bar. This period is non-negotiable, and if a claim is brought after it expires, the claimant is typically barred from pursuing the action.
Take breach of contract claims, for example. The standard time limit is six years from the date the breach occurred. Miss that window, and your claim is likely dead in the water.
But contracts can complicate this. They often include clauses that shorten (or sometimes even extend) the default time bar. For instance, a construction contract might specify a 12-month period to raise any disputes about defects. These shorter time limits are enforceable—unless they’re deemed unfair under laws.
Things get even trickier with international contracts, but we’ll talk more about that later.
Time Bars Defined by Contract
Okay, now you understand that the law sets the ground rules for time bars. What do contracts do, then?
Well, contracts allow parties to customize specific rules within the legal framework. Meaning: You can use contracts to impose tailored time limits—as long as you follow certain rules.
For instance:
You can shorten or potentially extend the standard six-year limitation period.
Time bar provisions must be clearly drafted.
Time bar clauses are interpreted strictly.
The provision must not completely eliminate a party’s right to legal recourse.
The key is ensuring that the time bar is reasonable, clear, and not unconscionable in its attempt to limit legal claims.
Before defining time bars in a commercial contract, we recommend that you consult one of ParrisWhittaker commercial contract disputes attorneys
to ensure your time limits are clear, enforceable, and compliant with legal standards—because one mistake could leave you exposed to costly claims.
Do Settlement Negotiations Pause the Clock on Time Bars?
In the previously mentioned case of Sahara Energy Resource Ltd. v. Société Nationale de Raffinage S.A. (Sonara), the court dealt with a situation where the parties attempted to argue that time bars were suspended due to settlement negotiations.
Sahara argued that:
A joint report contesting penalties restarted the six-year limitation period.
Each new financial loss created a fresh time bar.
Settlement talks implied an agreement to pause the limitation period.
The court, however, rejected these arguments, holding that the joint report wasn’t an acknowledgment of liability and that all losses stemmed from one original breach.
The final stance?
Settlement negotiations don’t automatically stop the clock on time bars, which meant that Sahara’s claims were time-barred.
This case underscored the strict enforcement of limitation periods—time bars don’t pause automatically unless there’s a clear, written agreement in a contract or specific legal provision.
Contract Negotiation Tips for Clarity in Time Bar Provisions
While there are plenty of things you can do to make your time bar provisions clear, we’ve gathered our top five tips to begin with:
Be Precise and Specific
Vague contract language is like an open invitation for disputes.
Want clarity? Spell out what triggers the time bar.
Is it the delivery date? The last payment? Or maybe the breach of contract itself?
Be specific. Avoid wishy-washy terms like “reasonable time” or “as soon as practicable.”
For example, in a construction contract, you might say, “The time bar begins on the date the final project completion certificate is issued.” Clear as day.
Align with Applicable Laws
Remember how we said earlier that international contracts complicate time bars even further?
Here’s why:
We’ve said that the legislation gives six years for most claims. But say, what if you’re running a UK company that’s also involved in a Bahamian real estate deal?
In that case, consulting the UK legislation alone wouldn’t cut it. You would also have to understand the Bahamas’ Limitation Act (1995).
Also, in specific industries or for specific types of contracts (e.g., shipping contracts), you might even need to factor in international acts such as the Hague-Visby Rules, which set their own one-year time limit for cargo claims.
Essentially, if your time bar doesn’t comply with all the relevant local, national, regional, and international laws – it’s useless.
Include an Unambiguous Suspension Clause for Negotiations
If the Sahara Energy vs. Sonara case taught us anything, it’s that settlement talks can stretch on forever, and before you know it, the time bar runs out.
Don’t let that happen. Add a clause that pauses the clock during negotiations.
For instance, in a distribution contract, you could say, “If parties enter into formal negotiations, the limitation period shall be suspended until 30 days after negotiations conclude.”
Simple and effective.
Document Acknowledgements
Here’s a sneaky way to reset the clock: formal acknowledgments.
If one party admits liability in writing, the time bar can restart. In a loan agreement, for example, a borrower’s written admission of default might restart the limitation period, giving you more time to claim.
But remember: you need to write this into the contract first!
Get It Reviewed by Local Legal Counsel
Local laws have quirks. What works in London or New York might not fly in Nassau.
Before signing, get a local lawyer to review your contracts.
Also, don’t forget that contracts are living documents. Laws change, businesses evolve, and your agreements need to keep up.
Meaning: Schedule regular reviews.
Conclusion
As you can see, when it comes to time bars, the best thing you can do is either stay ahead with airtight contracts or keep an eye on the clock.
Because time bars aren’t just a legal technicality—they’re the rules of the game.
Not sure where to start? Contact ParrisWhittaker’s attorneys to take it from here. We’ll help you stay in control with airtight commercial contracts, so time is always on your side.
