Can the contract shorten the time the other side has to sue in Florida?
No. Fla. Stat. § 95.03 makes void any provision in a contract fixing the period within which an action arising out of the contract may be begun at a time less than that provided by the applicable statute of limitations. The applicable periods for contract claims are five years for an action on a contract, obligation or liability founded on a written instrument (§ 95.11(2)(b), with carve-outs for payment-bond claims, deficiency judgments and property-insurance contracts) and four years for one not founded on a written instrument, including the sale and delivery of goods (§ 95.11(3)(j)).
The trap
Two Florida-specific twists. First, Florida is absolute where some states set a floor below which a contractual period may not go: § 95.03 voids any shortening at all, so there is no minimum period a Florida-law contract may validly specify. (Other states' floors are not read here and the Florida authorities cited do not establish them.) Second, the prohibition is escapable by choosing another state's law, but only on conditions the short version of this hides. Fla. Stat. § 671.105(1) lets the parties agree that another state's law will govern only 'when a transaction bears a reasonable relation to this state and also to another state or nation', and in Burroughs that relation was supplied by the seller being a Michigan corporation with its principal place of business in Michigan. Subsection (1) also opens 'Except as provided in this section', and the exception is § 671.105(2): where one of eight named code provisions specifies the applicable law itself, among them the perfection and priority rules in ss. 679.3011-679.3071, the rules of seller's creditors against sold goods in s. 672.402, and the leases provisions in ss. 680.1051 and 680.1061. That provision governs, and a contrary agreement is effective only so far as the law it specifies permits. The court then weighed FOUR factors, not two, carried over from its usury decision in Continental Mortgage Investors v. Sailboat Key: the policy of § 95.03 is riddled with exceptions; the legislature has frequently amended the limitation periods, demonstrating the policy's flexibility; the protections offered by a statute of limitations are not fundamental to a legal system; and such laws have a limited effect on a contract because they do not invalidate it but merely let the defendant plead an affirmative defense. On those four the court concluded the clause was not contrary to a strong public policy, quashed the Third District and directed that the trial court's dismissal of the contract counts be affirmed, so a two-year contractual limitation survived in a Florida court, on Michigan law, by four votes to two. Read the escape narrowly: the court recorded that Michigan law itself allowed a shortened period only down to a one-year floor, it recorded that under Florida law alone the two-year period 'would be held void', and the clause it upheld ran equally against both parties. Property insurance is also carved out of the five-year rule: § 95.11(2)(e) runs its period from the date of loss. And a limitation period is a ceiling, not a guarantee of time. Section 95.11(7) first makes laches bar any action not commenced within the time provided for legal actions concerning the same subject matter, and then adds: “This subsection shall not affect application of laches at an earlier time in accordance with law.” So an equitable claim can be barred before the statutory period runs out.
12 authorities
- statuteFla. Stat. § 95.03enactment date not established
The words that state the rule
95.03 Contracts shortening time.—Any provision in a contract fixing the period of time within which an action arising out of the contract may be begun at a time less than that provided by the applicable statute of limitations is void.
- statuteFla. Stat. § 95.11enactment date not established
The words that state the rule
(2) WITHIN FIVE YEARS.—(a) An action on a judgment or decree of any court, not of record, of this state or any court of the United States, any other state or territory in the United States, or a foreign country. (b) A legal or equitable action on a contract, obligation, or liability founded on a written instrument, except for an action to enforce a claim against a payment bond, which shall be governed by the applicable provisions of paragraph (6)(e), s. 255.05(10), s. 337.18(1), or s. 713.23(1)(e), and except for an action for a deficiency judgment governed by paragraph (6)(g). (c) An action to foreclose a mortgage. (d) An action alleging a willful violation of s. 448.110. (e) Notwithstanding paragraph (b), an action for breach of a property insurance contract, with the period running from the date of loss.
- statuteFla. Stat. § 95.11enactment date not established
The words that state the rule
(3) WITHIN FOUR YEARS.—(a) An action relating to the determination of paternity, with the time running from the date the child reaches the age of majority.
- statuteFla. Stat. § 95.11enactment date not established
The words that state the rule
(i) A legal or equitable action founded on fraud. (j) A legal or equitable action on a contract, obligation, or liability not founded on a written instrument, including an action for the sale and delivery of goods, wares, and merchandise, and on store accounts. (k) An action to rescind a contract.
- statuteFla. Stat. § 95.11enactment date not established
The words that state the rule
(7) LACHES.—Laches shall bar any action unless it is commenced within the time provided for legal actions concerning the same subject matter regardless of lack of knowledge by the person sought to be held liable that the person alleging liability would assert his or her rights and whether the person sought to be held liable is injured or prejudiced by the delay. This subsection shall not affect application of laches at an earlier time in accordance with law.
- statuteFla. Stat. § 671.105enactment date not established
The words that state the rule
(1) Except as provided in this section, when a transaction bears a reasonable relation to this state and also to another state or nation, the parties may agree that the law either of this state or of such other state or nation will govern their rights and duties. Failing such agreement, this code applies to transactions bearing an appropriate relation to this state.
- case472 So. 2d 1166Burroughs Corp. v. Suntogs of Miami, Inc.Fla.decided 1985-07-11read it at the source ↗
The words that state the rule
The sales contract contained a provision designating the law of Michigan as the law governing resolution of any legal dispute between the parties under the contract. The sales contract also contained a limitation-of-action provision requiring that any action arising from a claim of breach of the contract be brought within two years of the accrual of the cause of action.
- case472 So. 2d 1166Burroughs Corp. v. Suntogs of Miami, Inc.Fla.decided 1985-07-11read it at the source ↗
The words that state the rule
Under this Florida statute the two-year period provided in the contract would be held void because it is shorter than the five-year period provided for actions based on written contracts under section 95.11(2)(b), Florida Statutes (1975). However, the parties stipulated in their contract that the law of Michigan should govern its effect and interpretation. Michigan law permits the parties to a contract to designate a limitation period within which a lawsuit must be brought, even though shorter than any otherwise applicable statute of limitations, so long as they do not establish a time period of less than one year. Mich. Comp. Laws. § 440.2725 (1970).
- case472 So. 2d 1166Burroughs Corp. v. Suntogs of Miami, Inc.Fla.decided 1985-07-11read it at the source ↗
The words that state the rule
Because the defendant, Burroughs, is a Michigan corporation with its principal place of business in Michigan, the sale of the computer to Suntogs bears a reasonable relation to that state.
- case472 So. 2d 1166Burroughs Corp. v. Suntogs of Miami, Inc.Fla.decided 1985-07-11read it at the source ↗
The words that state the rule
First, we find the policy enunciated by section 95.03 to be riddled with exceptions. The courts of this state have refused to apply an earlier, even more stringent, [*] version of this section in actions controlled by maritime law, Arrow Beef Corp. v. South Atlantic & Caribbean Lines, Inc., 280 So.2d 43 (Fla. 3d DCA 1973); Coquette Originals, Inc. v. Canadian Gulf Line of Florida, Inc., 240 So.2d 847 (Fla. 3d DCA 1970); Foresman v. Eastern Steamship Corp., 177 So.2d 887 (Fla. 3d DCA 1965), and in actions where the only connection Florida had to the suit was the fact that the plaintiff resided here when the suit was filed, Aetna Casualty & Surety Co. v. Enright, 258 So.2d 472 (Fla. 3d DCA 1972); Quarty v. Insurance Co. of North America, 244 So.2d 181 (Fla. 2d DCA 1971). Second, the legislature has frequently amended the provisions controlling the statutory periods of limitation, demonstrating the flexibility of this public policy. Third, we do not consider the protections offered by a statute of limitations to be fundamental to a legal system. Before this section was originally enacted, contractual provisions shortening the period of time to bring a suit were valid and enforceable. National Surety Co. v. Williams, 74 Fla. 446 , 77 So. 212 (1918). Finally, the laws governing the time to bring a suit have a limited effect upon a contract insofar as they do not invalidate the contract, but merely allow the defendant to set up an affirmative defense.
- case472 So. 2d 1166Burroughs Corp. v. Suntogs of Miami, Inc.Fla.decided 1985-07-11read it at the source ↗
The words that state the rule
We therefore conclude that the contractual provision shortening the period of time for filing a suit was not contrary to a strong public policy. We quash the decision of the district court and remand with instructions that the trial court's order dismissing the suit be affirmed as to the counts arising from the contract. Because of its decision that the time-limitation clause had no effect, the district court did not need to decide the question of whether the claim of negligent performance was contractually based and therefore governed by the clause. Having quashed the district court's holding on the enforceability of the limitation clause, we direct that on remand the district court decide this question. The district court's decision on the fraud count, reversing summary judgment and remanding for trial, is not questioned in this proceeding. The decision under review is quashed and the case remanded for proceedings consistent with this opinion. It is so ordered. ADKINS, OVERTON, ALDERMAN and SHAW, JJ., concur. McDONALD and EHRLICH, JJ., dissent.
- statuteFla. Stat. § 671.105enactment date not established
The words that state the rule
(2) When one of the following provisions of this code specifies the applicable law, that provision governs; and a contrary agreement is effective only to the extent permitted by the law (including the conflict-of-laws rules) so specified:(a) Governing law in the chapter on controllable electronic records. (s. 669.107) (b) Governing law in the chapter on funds transfers. (s. 670.507) (c) Rights of sellers’ creditors against sold goods. (s. 672.402) (d) Applicability of the chapter on bank deposits and collections. (s. 674.102) (e) Applicability of the chapter on letters of credit. (s. 675.116) (f) Applicability of the chapter on investment securities. (s. 678.1101) (g) Law governing perfection, the effect of perfection or nonperfection, and the priority of security interests and agricultural liens. (ss. 679.3011-679.3071) (h) Applicability of the chapter on leases. (ss. 680.1051 and 680.1061)
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.