How long does a Delaware contract claim last, and can the contract change the period?
Three years is the default, with real exceptions, some named by § 8106(a) itself, some sitting elsewhere in the same chapter: § 8111 gives wages and personal-services claims 2 years, § 8117 does not count a defendant's time out of the State, § 8118 allows a new action within 1 year of an abated one, and § 8121 borrows the shorter of Delaware's period and that of the state where the cause arose. 10 Del. C. § 8106 is headed “Actions subject to 3-year limitation”, and subsection (a) bars an action based on a promise, an action to recover a debt “not evidenced by a record or by an instrument under seal”, and an action on a detailed statement of mutual demands arising out of contractual or fiduciary relations “after the expiration of 3 years from the accruing of the cause of such action; subject, however, to the provisions of §§ 8108-8110, 8119 and 8127 of this title.” Those cross-references are not decoration, and two of them change the answer for ordinary commercial paper and construction work. § 8109 gives SIX years, not three, where “a cause of action arises from a promissory note, bill of exchange, or an acknowledgment under the hand of the party of a subsisting demand”. And § 8108 suspends the clock entirely on an open account: “In the case of a mutual and running account between parties, the limitation, specified in § 8106 of this title, shall not begin to run while such account continues open and current.” Three adjustments matter to a drafter. First, for a written contract, agreement or undertaking involving at least $100,000, § 8106(c) lets the parties specify their own period, provided suit is brought before 20 years from accrual, and it says so notwithstanding 6 Del. C. § 2-725. Second, for a contract for the sale of goods, § 2-725(1) sets 4 years and the original agreement “may reduce the period of limitations to not less than one year but may not extend it”; under (2) that clock runs from the breach “regardless of the aggrieved party's lack of knowledge of the breach”, a breach of warranty occurs on tender of delivery unless the warranty explicitly extends to future performance, and under (3) where a timely action is terminated so as to leave another available the second may be brought within 6 months of the termination unless it was voluntarily discontinued or dismissed for failure to prosecute. Subsection (4) preserves tolling law: the section “does not alter the law on tolling of the statute of limitations”. Third, § 8106's own subsection (b), headed Contractual limitations, provides that a property insurance contract under subchapter III of Chapter 41 of Title 18 may not require suit less than 1 year from the insurer's denial, and may permit more. Construction work sits under its own section, and it is a contract provision. § 8127(b) reaches “No action, whether in or based upon a contract (oral or written, sealed or unsealed), in tort, or otherwise” for a deficiency in the construction or design of an improvement to real property, and bars it “after the expiration of 6 years” from the earliest of eight dates (several of them dates the parties may fix in the contract) “or after the period of limitations provided in the contract, if the contract provides such a period and if such period expires prior to the expiration of 2 years from whichever of the foregoing dates is earliest.” So a construction contract's own shorter period is given effect, within limits, and 'Contract' in § 8127(a)(3) means the prime or general contract between the general contractor and the owner, so a subcontract's period is not what the section gives effect to. But § 8127(c) is express that “Nothing in this section shall extend or lengthen” the period otherwise prescribed.
The trap
Delaware is a jurisdiction where the contract can make the clock LONGER, not just shorter, but only above a dollar threshold and only in writing: § 8106(c) unlocks a period specified in a written contract “involving at least $100,000”, up to 20 years from accrual, and it says so notwithstanding 6 Del. C. § 2-725. Section 8106(c) does not reach a contract below that threshold, and no other Delaware provision reviewed here lets a party lengthen a limitations period by agreement. A survival clause that gives a buyer, say, five years to sue on a representation therefore depends on the deal clearing $100,000 and on the promise being in writing. Do not stop at “three years”, because § 8106(a) says in its own closing words that it is subject to five other sections, and two of them are everyday commercial law. A promissory note, a bill of exchange or a signed acknowledgment of a subsisting demand gets SIX years under § 8109, so the same loan documented two different ways has two different deadlines. And on a mutual and running account § 8108 stops the clock (as does § 8117 for as long as the defendant is out of the State, while § 8121 shortens it where the claim arose elsewhere) from starting at all while the account stays open and current, which can keep a long trading relationship live far past three years from any individual invoice. Construction is a third track, but only non-residential construction: § 8127(a)(5) excludes from 'Improvement' anything 'used or intended to be used at the time of such construction primarily for residential purposes and uses', and § 8127(d) withdraws the limitation altogether against a person in actual possession or control of the improvement when the deficiency causes the injury. § 8127 bars contract, tort and indemnity claims for construction and design deficiencies after 6 years from the earliest of a list of dates, and it enforces a SHORTER period the contract provides, so long as it does not expire before 2 years from the earliest of those dates, while § 8127(c) forbids reading the section to extend anything. A construction contract therefore cannot buy itself the § 8106(c) twenty-year window for a deficiency claim merely by being worth more than $100,000. For sales of goods, § 2-725(2) runs the clock from breach regardless of the aggrieved party's lack of knowledge, with a tender-of-delivery rule for warranties, and § 2-725(4) leaves tolling doctrine untouched. One more thing § 8106(a) does and does not say: it bars a three-year action on a debt “not evidenced by a record or by an instrument under seal”, which implies a sealed instrument is on some other footing, but no Delaware section setting the period for one was located, so this rule does not state what a seal buys.
17 authorities
- statute10 Del. C. § 8106enactment date not established
The words that state the rule
(c) Notwithstanding anything to the contrary in this chapter (other than subsection (b) of this section) or in § 2-725 of Title 6, an action based on a written contract, agreement or undertaking involving at least $100,000 may be brought within a period specified in such written contract, agreement or undertaking provided it is brought prior to the expiration of 20 years from the accruing of the cause of such action.
- statute6 Del. C. § 2-725enactment date not established
The words that state the rule
§ 2-725. Statute of limitations in contracts for sale. (1) An action for breach of any contract for sale must be commenced within 4 years after the cause of action has accrued. By the original agreement the parties may reduce the period of limitations to not less than one year but may not extend it.
- statute10 Del. C. § 8106enactment date not established
The words that state the rule
§ 8106. Actions subject to 3-year limitation. (a) No action to recover damages for trespass, no action to regain possession of personal chattels, no action to recover damages for the detention of personal chattels, no action to recover a debt not evidenced by a record or by an instrument under seal, no action based on a detailed statement of the mutual demands in the nature of debit and credit between parties arising out of contractual or fiduciary relations, no action based on a promise, no action based on a statute, and no action to recover damages caused by an injury unaccompanied with force or resulting indirectly from the act of the defendant shall be brought after the expiration of 3 years from the accruing of the cause of such action; subject, however, to the provisions of §§ 8108-8110, 8119 and 8127 of this title.
- statute6 Del. C. § 2-725enactment date not established
The words that state the rule
(2) A cause of action accrues when the breach occurs, regardless of the aggrieved party’s lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered.
- statute6 Del. C. § 2-725enactment date not established
The words that state the rule
(3) Where an action commenced within the time limited by subsection (1) is so terminated as to leave available a remedy by another action for the same breach such other action may be commenced after the expiration of the time limited and within 6 months after the termination of the first action unless the termination resulted from voluntary discontinuance or from dismissal for failure or neglect to prosecute.
- statute10 Del. C. § 8106enactment date not established
The words that state the rule
(b) Contractual limitations. — Notwithstanding any other provision of this section, a property insurance contract subject to subchapter III of Chapter 41 of Title 18: (1) May not require that an action for a claim made under the contract be filed less than 1 year from the date of the denial of the claim by the insurer; and (2) May permit an action for a claim made under the contract to be filed more than 1 year from the date of the denial of the claim by the insurer.
- statute6 Del. C. § 2-725enactment date not established
The words that state the rule
(4) This section does not alter the law on tolling of the statute of limitations nor does it apply to causes of action which have accrued before this subtitle becomes effective.
- statute10 Del. C. § 8109enactment date not established
The words that state the rule
§ 8109. Bills and notes. When a cause of action arises from a promissory note, bill of exchange, or an acknowledgment under the hand of the party of a subsisting demand, the action may be commenced at any time within 6 years from the accruing of such cause of action.
- statute10 Del. C. § 8108enactment date not established
The words that state the rule
§ 8108. Mutual running accounts. In the case of a mutual and running account between parties, the limitation, specified in § 8106 of this title, shall not begin to run while such account continues open and current.
- statute10 Del. C. § 8127enactment date not established
The words that state the rule
(b) No action, whether in or based upon a contract (oral or written, sealed or unsealed), in tort, or otherwise, to recover damages or for indemnification or contribution for damages, resulting: (1) From any alleged deficiency in the construction or manner of construction of an improvement to real property and/or in the designing, planning, supervision and/or observation of any such construction or manner of construction; or (2) From any alleged injury to property, real, personal or mixed, arising out of any such alleged deficiency; or (3) From any alleged personal injuries arising out of any such alleged deficiency; or (4) From any alleged wrongful death arising out of any such alleged deficiency; or (5) From any alleged trespass arising out of any such alleged deficiency; or (6) From any alleged injury unaccompanied with force or resulting indirectly from any such alleged deficiency; shall be brought against any person performing or furnishing, or causing the performance or furnishing of, any such construction of such an improvement or against any person performing or furnishing, or causing the performing or furnishing of, any such designing, planning, supervision, and/or observation of any such construction or manner of construction of such an improvement, after the expiration of 6 years from whichever of the following dates shall be earliest: a. The date of purported completion of all the work called for by the contract as provided by the contract if such date has been agreed to in the contract itself; b. The date when the statute of limitations commences to run in relation to the particular phase or segment of work performed pursuant to the contract in which the alleged deficiency occurred, where such date for such phase or segment of work has been specifically provided for in the contract itself; c. The date when the statute of limitations commences to run in relation to the contract itself where such date has been specifically provided for in the contract itself; d. The date when payment in full has been received by the person against whom the action is brought for the particular phase of such construction or for the particular phase of such designing, planning, supervision, and/or observation of such construction or manner of such construction, as the case may be, in which such alleged deficiency occurred; e. The date the person against whom the action is brought has received final payment in full, under the contract for the construction or for the designing, planning, supervision, and/or observation of construction, as the case may be, called for by contract; f. The date when the construction of such an improvement as called for by the contract has been substantially completed; g. The date when an improvement has been accepted, as provided in the contract, by the owner or occupant thereof following the commencement of such construction; h. For alleged personal injuries also, the date upon which it is claimed that such alleged injuries were sustained; or after the period of limitations provided in the contract, if the contract provides such a period and if such period expires prior to the expiration of 2 years from whichever of the foregoing dates is earliest.
- statute10 Del. C. § 8127enactment date not established
The words that state the rule
(c) Nothing in this section shall extend or lengthen, nor shall anything in this section be construed or interpreted as extending or lengthening, the period otherwise prescribed by the laws of this State for the bringing of any action covered by this section.
- statute10 Del. C. § 8127enactment date not established
The words that state the rule
(a) As used in this section: (1) “Action” shall include actions at law or in equity, or otherwise, instituted and/or prosecuted by or on behalf of this State, any of its agencies, commissions, departments or political subdivisions, and by or on behalf of any other governmental subdivision, agency, department or body, as well as by or on behalf of private individuals, persons, parties, corporations, partnerships, associations and other entities. (2) “Construction” shall include construction, erection, building, alteration, reconstruction and destruction of improvements to real property. (3) “Contract” shall mean the prime or general contract between the general contractor, on the one hand, and the owner or agent of the owner of the real property upon which or to which the construction is to be performed or the owner or agent of the owner of the improvement to be constructed, on the other hand. (4) “Deficiency” shall include acts and actions performed and failures to act and omissions. (5) “Improvement” shall include buildings, highways, roads, streets, bridges, entrances and walkways of any type constructed thereon, and other structures affixed to and on land, as well as the land itself, except that such term shall not include buildings, entrances, walkways and structures used or intended to be used at the time of such construction primarily for residential purposes and uses.
- statute10 Del. C. § 8127enactment date not established
The words that state the rule
(d) The limitations prescribed by this section shall not be available by way of a defense to any person in actual possession or actual control, as owner, tenant or otherwise, of such an improvement at the time when the alleged deficiency in such an improvement constitutes the proximate cause of the injury or death for which it is proposed to bring an action.
- statute10 Del. C. § 8111enactment date not established
The words that state the rule
No action for recovery upon a claim for wages, salary, or overtime for work, labor, or personal services performed, or for damages (actual, compensatory, or punitive, liquidated or otherwise), or for interest or penalties resulting from the failure to pay any such claim, or for any other benefits arising from such work, labor, or personal services performed or in connection with any such action, shall be brought after the expiration of 2 years from the accruing of the cause of action on which such action is based.
- statute10 Del. C. § 8117enactment date not established
The words that state the rule
If at the time when a cause of action accrues against any person, such person is out of the State, the action may be commenced, within the time limited therefor in this chapter, after such person comes into the State in such manner that by reasonable diligence, such person may be served with process. If, after a cause of action shall have accrued against any person, such person departs from and resides or remains out of the State, the time of such person’s absence until such person shall have returned into the State in the manner provided in this section, shall not be taken as any part of the time limited for the commencement of the action.
- statute10 Del. C. § 8118enactment date not established
The words that state the rule
(a) If in any action duly commenced within the time limited therefor in this chapter, the writ fails of a sufficient service or return by any unavoidable accident, or by any default or neglect of the officer to whom it is committed; or if the writ is abated, or the action otherwise avoided or defeated by the death of any party thereto, or for any matter of form; or if after a verdict for the plaintiff, the judgment shall not be given for the plaintiff because of some error appearing on the face of the record which vitiates the proceedings; or if a judgment for the plaintiff is reversed on appeal or a writ of error; a new action may be commenced, for the same cause of action, at any time within 1 year after the abatement or other determination of the original action, or after the reversal of the judgment therein. (b) If in the original action, the benefit of this chapter is pleaded, and a verdict upon such defense is found for the plaintiff, such verdict shall be conclusive evidence that the original action was commenced within the time limited therefor.
- statute10 Del. C. § 8121enactment date not established
The words that state the rule
Where a cause of action arises outside of this State, an action cannot be brought in a court of this State to enforce such cause of action after the expiration of whichever is shorter, the time limited by the law of this State, or the time limited by the law of the state or country where the cause of action arose, for bringing an action upon such cause of action. Where the cause of action originally accrued in favor of a person who at the time of such accrual was a resident of this State, the time limited by the law of this State shall apply.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.