§ 337.Contract, Obligation Or Liability Founded Upon Written Instrument; Book Account; Rescission of Contract

Section 337 is the anchor for written-contract litigation in California. It gives four years to sue on any contract, obligation, or liability founded on a written instrument, unless § 336a’s six-year period for publicly held bonds applies instead. One built-in wrinkle: after a lender exercises a private power of sale under a deed of trust or mortgage, a separate suit for the deficiency — the shortfall between what’s owed and what the sale brought — must be filed within three months of the sale, not four years.

The same four years covers a written book account, a written account stated, and a mutual open account whose entries are in writing. For a one-item account stated, the clock starts on the date of that item; for a multi-item account, it starts on the date of the last item.

Subdivision (c) covers rescission of a written contract. Ordinarily the four years runs from the date the facts entitling the party to rescind occurred, but if the ground for rescission is fraud or mistake, the clock doesn’t start until the aggrieved party discovers those facts. A parallel rule applies when the rescission ground is a misrepresentation under Insurance Code § 359, where time runs from when the representation becomes false.

Once the four-year (or three-month deficiency) period expires, subdivision (d) bars not just a lawsuit but also arbitration or any other legal proceeding to collect the debt — and the only way to extend that period is through § 360, the acknowledgment-or-new-promise statute.