In addition to these general rules, the applicability of an agreement that purports to extend or shorten a limitation period may depend on certain factors, including the nature and wording of the agreement itself. We recommend that you seek legal advice before entering into a contract that attempts to extend or shorten a limitation period. If you have any questions about extending or shortening limitation periods in a commercial contract, please do not hesitate to contact us. Second, the legislation of Victoria and South Australia contains mandatory language that suggests that the time limit applies independently of other considerations, such as the common law`s general tolerance for negotiations (which the High Court has taken into account). For example, the Construction Act 1993 (Vic) states that the 10-year limitation period applies “unless otherwise provided in the Limitation of Shares Act 1958 or any other law or law”. It is common for companies to offer consumers the same or a similar contract. This is called a standard contract. The Limitation of Actions Act 1974 (Qld) contains provisions that set the time limit within which a legal action such as a breach of contract or the recovery of land or money may be brought. The general position is that the proceedings must be commenced within 6 or 12 years from the date on which the plea arose, which is widely reflected in all States and Territories of Australia.
As a starting point, the court confirmed that statutory limitation periods do not extend to the jurisdiction of a court to rule on an action, but to the available remedy. A plea is not null and void by law, but creates a defence against the remedy, which must be invoked. The court concluded that a statutory limitation period gives an individual defendant the right to invoke a limitation period – an individual right that a defendant can contractually waive. The High Court, referring to its earlier decisions Westfield Management Ltd v. AMP Capital Property Nominees Ltd (2012) 247 CLR 129, held that a person to whom a law confers a right may waive that right unless it is contrary to law. Clear examples of this are when there is a provision that expressly prohibits the expiration of rights, or when the law, properly interpreted, is incompatible with a person`s right to renounce. Therefore, parties to a commercial contract in Alberta may agree to extend a basic limitation period, but cannot agree to shorten it. Although the present case appears to be specifically applicable, parts of the judgment leave open the possibility that similar clauses in model contracts may be challenged. Article 24 of the limitation period provides that when the 12-year period for bringing an action for the recovery of land has expired, the right of the person to that land “expires”. Continuing our series on limitation periods, this article examines a recent construction case that deals with the right of companies to “outsource” the otherwise applicable two-year limitation period and how this decision affects potential third-party claims.
In the case of contracts for works performed as an act, this should not be too problematic, as the statutory limitation period would independently expire 12 years after the practical completion. However, this proposed clause could serve to limit any claim that might arise after a practical conclusion, for example for the non-elimination of defects during the limitation period. Manitoba`s law reform was addressed on this issue when it released the Restriction Commission`s Report No. 123 in July 2010. That report contained a recommendation that “the parties should be allowed to agree to extend the restrictions, but not to shorten them” (pp. 50-51 and 117). The report further proposed to include the following language in the Limitation Of Actions Act (Manitoba): In response to the lawsuit, Weidberg denied any liability and filed a third-party lawsuit against Makow. The claim was based on negligence and asserted that Makow was wholly or partially liable for the losses. The action was not based on a contractual indemnification clause and was brought within two years of service of the action against Weidberg. (1) A limitation period under this Act may be extended by agreement, but not shortened. However, parties should not presume that a provision intended to restrict a person`s right to invoke the application of a statutory limitation period is still enforceable. The contract at issue in the present case was a hypothec which the Court expressly recognised as “the result of free negotiations between the parties who, under the usual market conditions”, were contracting parties”.
Each judgment will be enforced taking into account the commercial nature of the agreement. So there may be circumstances (for example. B, in the consumer context) in which a court could conclude that a term intended to prevent a party from invoking limitation periods may constitute an unfair contract term having regard to the relative bargaining power of the parties concerned and is unenforceable on that basis. In the case of a refund, the time limit depends on the reasons why the refund is requested. The limitation period would continue to be applied by a judge, even in cases where he could shorten the period to less than one year. The Latent Damages Act introduces the element of detectability and provides for an additional period of three years from the discovery of a hidden defect. The mortgage was not repaid on the repayment date of July 2, 2000. It became common ground that, if the duration of the contract was inapplicable and the abovementioned limitation periods applied, the rights of the hypothecary creditor to demand repayment of the loan were definitively time-barred. The Court noted that the policy of finality could still be achieved in a dispute, but in accordance with the general principle of “freedom of contract”, it had been left to each defendant to decide whether or not to rely on it. The contractual exclusion of the statutory limitation period was therefore maintained. The High Court`s decision was rendered with respect to the rights of mortgagees and hypothecary creditors, as well as limitation periods for mortgage parties and land recovery actions.
However, the principles on which the decision is based are likely to apply broadly to the application of limitation periods both in the Queensland Statute of Limitations and in relevant legislation in other States where there is no express provision permitting or prohibiting the expiry of limitation periods[8]. However, subsection 7(2) of the Limitations Act (Alberta) provides that the general limitation period cannot be shortened by agreement. On the contrary, any agreement that purports to shorten the general limitation period becomes invalid because of this provision of the law. Makow argued that Weidberg`s claim for damages was limited by the provisions of its own contract with the plaintiff. Since the contract excluded all claims against Makow made by the owners more than six years after the closure of the equipment, they argued that they could not be sued for contribution in a claim of the owners initiated outside this period. On the other hand, the borrowers also put forward an argument that, regardless of the limitation period provided for in Article 13, the creditors` right of ownership was extinguished by the independent exploitation of Article 24. The High Court rejected this argument and confirmed that Article 24 did not operate independently, but that it was an ancillary provision intended to facilitate the expiry of the limitation period provided for in Article 13[7]. It is likely that if these types of clauses are more common in contracts, they will be challenged when a party attempts to assert its rights after a legal period of time. In the case of works contracts, the breach of contract is deemed to have occurred upon practical completion (Coburn v. Colledge).
The reason for this is that there is usually an obligation for a contractor to “perform and complete” the work. If the contractor has not properly completed the work by the completion date, the cause of action arises. Only at the time of practical completion can the work be deemed defective. All states and territories have laws that provide for similar statutes of limitations.1 However, the Limitations Act (Saskatchewan) does not specify whether a basic limitation period can be shortened by agreement. Moreover, the issue does not appear to have been decided at Saskatchewan common law under trade agreements. Although the Court of Queen`s Bench for Saskatchewan in Seaman v. Saskatchewan Mutual Insurance Company, 2015 SKQB 197, has ruled that a limitation period under the Saskatchewan Insurance Act cannot be shortened, there remains a point of uncertainty as to whether a basic limitation period in a commercial contract can be shortened. The most important thing to remember here is that it is a mistake to assume that you are 12 years old from the practical completion to make a claim.
Provisions such as the one discussed in this blog may give a false sense of security, as these types of clauses do not necessarily reflect the limitation period that would otherwise apply by law. They limit, but do not extend, the legal limitation period. .