Does making a partial payment or acknowledging a debt restart the limitation period for a contract claim in Ontario?

Yes, in most cases. Under section 13 of the Limitations Act, 2002, a written and signed acknowledgment of a debt or contractual obligation, made before the original two-year limitation period expires, resets the clock: a new two-year period begins running from the date of the acknowledgment, not the original breach.

Part payment of a debt can have the same effect, even without a separate written acknowledgment, if the payment is made in circumstances that reasonably imply the debtor is acknowledging the debt as still owing. A partial payment made purely as a "goodwill" gesture with an explicit denial of the debt attached is less likely to qualify, so how a payment is framed matters.

This matters most in ongoing commercial relationships, where invoices go unpaid for a period, a partial payment is made, negotiations continue, and the parties lose track of exactly when the original limitation period would otherwise have expired. Creditors relying on an acknowledgment to save a stale claim should be able to point to something in writing and signed by the debtor or their agent — a verbal acknowledgment alone is generally not sufficient under the Act.

If you are close to, or past, what you believe is your two-year deadline, do not assume an acknowledgment or partial payment has saved your claim without confirming it meets the Act's requirements — get advice before relying on it.