Six-Month Statute of Limitations in Subcontract Was Enforceable
Contracts sometimes include a limitations period for pursuing claims. A New York appellate court has held that a six-month contract limitations period was not unreasonably short, and has dismissed a lawsuit commenced less than nine months after the contract was terminated.
An HVAC sub performed work and was never paid. The sub terminated the contract for non-payment on January 29, 2014, and then filed a lawsuit on October 15, 2014. The general contractor moved to dismiss the lawsuit as untimely, given the six-month limitations period in the contract. The sub argued in response that the six-month period was unreasonably short and thus “void as against public policy.”
The court did not agree. So long as the contract was not one of adhesion, or the result of overreaching, a six-month limitations period is not unreasonably short. And the court cited to prior NY decisions upholding a six-month limitations period within a contract. The lesson? Pay attention to those short clocks for pursuing claims or lawsuits!
The case is Polar Bear Mech., Inc. v Walison Corp., 2017 N.Y. Misc. LEXIS 2471 (June 22, 2017).