How long do we have to sue on this contract in North Dakota, and can the contract shorten that period?
Six years for most contracts, ten for a contract contained in an instrument affecting title to real property, four for a sale of goods, and a clause shortening any of them is void unless another North Dakota statute permits it. N.D.C.C. § 28-01-16(1): an action "upon a contract, obligation, or liability, express or implied" must be commenced "within six years after the claim for relief has accrued," and the item is expressly "subject to the provisions of sections 28-01-15 and 41-02-104." Section 28-01-15 is the ten-year list, and it reaches contracts: "[a]n action upon a contract contained in any conveyance or mortgage of or instrument affecting the title to real property except a covenant of warranty," an action on a judgment, and an action to foreclose a real-estate mortgage. For a sale of goods, N.D.C.C. § 41-02-104(1) (UCC 2-725) instead gives four years: "An action for breach of any contract for sale must be commenced within four years after the claim for relief has accrued. By the original agreement the parties may reduce the period of limitation to not less than one year but may not extend it." And a clause that tries to shorten any of these periods runs into N.D.C.C. § 9-08-05: "Every stipulation or condition in a contract by which any party thereto is restricted from enforcing that party's rights under the contract by the usual legal proceedings in the ordinary tribunals or which limits the time within which that party thus may enforce that party's rights is void, except as otherwise specifically permitted by the laws of this state." L&C Expedition v. Swenson, Hagen and Co. reads that section the way a drafter has to: it "does void all provisions in a contract which limit the time within which a party can enforce their rights, but specifically allows for parties to limit the time for asserting a claim if another North Dakota law permits the limitation."
The trap
Section 41-02-104 is one such permission and not the only one. It lets the ORIGINAL agreement (not a later amendment) reduce the goods-sale period to not less than one year, and the period may never be extended by agreement. Outside goods, L&C Expedition held that § 22-03-03, which provides that "[a] surety cannot be held beyond the express terms of the surety's contract," "serves as an exception under N.D.C.C. § 9-08-05," so a two-year suit deadline written into a performance bond was enforceable and the owner's claim against the surety was time-barred: "The two year limitation for asserting a claim provided for in the performance bond is enforceable." The permission has to come from a statute. The phrase "except as otherwise specifically permitted by the laws of this state" is "[t]he primary difference between the two statutes" when § 9-08-05 is set beside the older provision that carried no exceptions, and it is why the decision striking a 15-month deadline under that older provision "is not controlling." What is still unanswered is whether any statute permits shortening the six-year period for a contract that is neither a surety contract nor a sale of goods. Section 41-02-104(2) also carries its own accrual trap: a breach of warranty accrues at TENDER OF DELIVERY, not at discovery, "except that if a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the claim for relief accrues when the breach is or should have been discovered": a future-performance warranty is the narrow exception, not the rule, and the statute expressly disclaims any change to tolling law.
11 authorities
- statuteN.D.C.C. § 28-01-16enactment date not established
The words that state the rule
The following actions must be commenced within six years after the claim for relief has accrued: - An action upon a contract, obligation, or liability, express or implied, subject to the provisions of sections 28-01-15 and 41-02-104.
- statuteN.D.C.C. § 41-02-104enactment date not established
The words that state the rule
An action for breach of any contract for sale must be commenced within four years after the claim for relief has accrued. By the original agreement the parties may reduce the period of limitation to not less than one year but may not extend it.
- statuteN.D.C.C. § 41-02-104enactment date not established
The words that state the rule
A claim for relief 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 if a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the claim for relief accrues when the breach is or should have been discovered.
- statuteN.D.C.C. § 41-02-104enactment date not established
The words that state the rule
This section does not alter the law on tolling of the statute of limitations nor does it apply to claims for relief which have accrued before this title becomes effective.
- statuteN.D.C.C. § 9-08-05enactment date not established
The words that state the rule
Every stipulation or condition in a contract by which any party thereto is restricted from enforcing that party's rights under the contract by the usual legal proceedings in the ordinary tribunals or which limits the time within which that party thus may enforce that party's rights is void, except as otherwise specifically permitted by the laws of this state.
- statuteN.D.C.C. § 28-01-15enactment date not established
The words that state the rule
The following actions must be commenced within ten years after the claim for relief has accrued: - An action upon a judgment or decree of any court of the United States or of any state or territory within the United States; - An action upon a contract contained in any conveyance or mortgage of or instrument affecting the title to real property except a covenant of warranty, an action upon which must be commenced within ten years after the final decision against the title of the covenantor; and - Any action or proceeding for the foreclosure of a mortgage upon real estate.
- statuteN.D.C.C. § 22-03-03enactment date not established
The words that state the rule
A surety cannot be held beyond the express terms of the surety's contract and if such contract prescribes a penalty for its breach, the surety cannot be liable in any case for more than the penalty.
The words that state the rule
Section 9-08-05, N.D.C.C., does void all provisions in a contract which limit the time within which a party can enforce their rights, but specifically allows for parties to limit the time for asserting a claim if another North Dakota law permits the limitation.
The words that state the rule
The language of the statute provides a surety cannot be held beyond the terms in the contract nor held beyond the amount of liability provided for in the contract. A contract provision which limits the amount of time a party is allowed to bring suit is an express provision of the contract. Therefore, N.D.C.C. § 22-03-03 provides that if the parties contractually agree to a limitation on the time to bring a claim, the surety cannot be held beyond that limitation. N.D.C.C. § 22-03-03 serves as an exception under N.D.C.C. § 9-08-05.
The words that state the rule
The two year limitation for asserting a claim provided for in the performance bond is enforceable, L&C failed to bring suit within two years, and L&C is barred from asserting its claims against IFIC. We affirm.
The words that state the rule
The primary difference between the two statutes is the addition of the phrase “except as otherwise specifically permitted by the laws of this state[]” in N.D.C.C. § 9-08-05. As discussed above, N.D.C.C. § 22-03-03 serves as an exception to Section 9-08-05. The statute analyzed in Storing did not provide for any exceptions. Storing is not controlling.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.