Builders and Contractors Exchange
Weekly Bulletin: 04 Oct 2004
Statutes of Limitations and Statutes of Response - Don't Lose Your Rights!
By: Pat Genzler
Most business people are familiar with the concept of a "statute of limitations." Basically, it is a law that provides that any lawsuit must be brought within a certain period of time or, in most cases, you lose your rights to file the suit. However, the actual operation and effect of a statute of limitation, and the closely related concept of "statute of repose," can be complicated. In this article, we'll discuss the statutes of limitations and repose that are of most concern to contractors when dealing with contract and construction disputes.
Common limitation periods are:
- 2 years to bring actions for personal injuries or fraud;
- 2 years from the death of an injured person for actions alleging wrongful death;
- 5 years to bring actions for damage to property;
- 5 years to bring actions on written contracts, and
- 3 years to bring actions on unwritten or implied contracts.
When does the statute of limitation begin to run? In general, Virginia law provides that a statutory limitation period begins to run from (1) the date a breach of contract occurs (not when the damage or result is discovered) for contract claims, or (2) the date an injury to person or property is sustained (again, not when discovered). This result has been modified for contract fraud claims, and certain breach of warranty claims arising from "latent defects" or those that could not be reasonably discovered upon inspection.
While the above limitations apply to general contract and construction disputes, certain types of legal actions have their own limitation periods. For example, a suit to enforce a properly filed mechanics lien must be filed within the later of six months from the date the lien is filed, or 60 days from the completion of the project.
Although we commonly think of statutes of limitations as absolute bars to lawsuits, that is not correct. A statute of limitation is an affirmative defense that must be raised in court pleadings, or it is waived. Not so, however with a "statute of repose." When the period specified in a "statute of repose" has passed, the right to bring a suit is extinguished, and cannot be revived. One of the most important "statutes of repose" to contractors is the 5 year period of repose for any action for injury to property, bodily injury, or death arising out of a defective and unsafe condition on real property due to alleged defects in design or construction. The 5 year period runs from the date of the "performance" of the design services or construction.
You should be aware that the Commonwealth is not generally subject to statutes of limitation unless the law specifically says that they will be.
Finally, you should be aware that the limitation period for bringing suit can be shortened by contract. For example, if the disputes resolution provision of your contract provides that all suits or claims must be filed within one year or they are waived, Virginia courts will typically uphold such a contractual limitation, even though it is much shorter than the 5 year limitation provided in the law. This issue frequently comes up in performance and payment bond actions, which often have a relatively short period in which claims can be filed on the bond.
In summary, whenever you have a significant dispute, one of the first things you should check out is what is the applicable limitation - statutory or contractual - on making your claim or filing suit. Failure to file within that period can often be fatal to an otherwise meritorious claim. If you have any questions concerning what the applicable limitation is, you should immediately seek assistance from an experienced construction lawyer.
Questions?
If you have any questions about this article or any other related matters, please contact:
This article is meant to bring awareness to this topic and is not intended to be used as legal advice.