How long do we have to sue on this Nebraska contract, and can the contract shorten it?
Five years on a written contract, four on an oral one, and no, the parties cannot shorten it, because in Nebraska a clause setting ANY period different from the statutory one is void as against public policy. Neb. Rev. Stat. § 25-205(1): “an action upon a specialty, or any agreement, contract, or promise in writing, or foreign judgment, can only be brought within five years.” Neb. Rev. Stat. § 25-206: “An action upon a contract, not in writing, expressed or implied, or an action upon a liability created by statute, other than a forfeiture or penalty, can only be brought within four years.” The contractual rule is old, consistently applied, and a genuine minority position. Miller v. State Insurance holds that a provision requiring suit “within a time therein specified, which is different from the time which the statute fixes for bringing an action on such contract, or for a breach thereof, is against public policy, and will not be enforced by the courts of this state”. Grand View Building Ass'n v. Northern Assurance Co. puts the reason: “A man may not by contract deprive himself of the right to apply to the courts for the protection of his person, property or liberty in the manner or within the time prescribed by public law”, and it refused an invitation to overrule the earlier cases. And it is not an insurance-only rule: Dunlop Tire & Rubber Corp. v. Ryan applied it to a WRITTEN GUARANTY with a New York choice-of-law clause and held an attempt to LENGTHEN the Nebraska period bad: the guaranty was “an agreement which extended the limitation upon the right to maintain action for recovery beyond the period fixed by the statutes of Nebraska. The attempt to so extend the right was void.”, while marking the one escape, “This rule of course does not apply to a valid contract entered into in a foreign state.” Where a statute authorises a shorter period, the clause stands: Brodine v. Blue Cross Blue Shield holds “the general 5-year statute of limitations must yield to the 3-year provision in the Blue Cross policy because such provision is authorized by the statutes regulating health insurance policies”, and the Nebraska Condominium Act and the Nebraska Time-Share Act each expressly permit a reduction, Neb. Rev. Stat. § 76-890, “the parties may agree to reduce the period of limitation to not less than one year”, and Neb. Rev. Stat. § 76-1723, “the parties may agree in writing to reduce the period of limitation to not less than two years”. For construction, Neb. Rev. Stat. § 25-223 gives four years with a ten-year repose, and for professional services Neb. Rev. Stat. § 25-222 gives two years with a ten-year repose.
The trap
The “any claim must be brought within one year” clause that works in most states is VOID in Nebraska, and so is a clause that lengthens the period. It is not a reasonableness test and not a conspicuousness test, Miller v. State Insurance struck a six-month insurance-policy clause in 1898 and stated the rule without a reasonableness qualifier: a contract providing that no "action shall be brought thereon, or for a breach thereof, unless within a time therein specified, which is different from the time which the statute fixes for bringing an action on such contract, or for a breach thereof, is against public policy, and will not be enforced by the courts of this state." The most important authority for a commercial contract is Dunlop, because it is not an insurance case: a written guaranty, commercial parties, and the attempt to move the period was held void. A 2015 Court of Appeals decision marks the limit: Intervision Sys. Techs. v. InterCall read the rule “literally and narrowly” and upheld a 30-day notice-of-claim clause in a commercial services contract, because it is not a statute of limitations clause at all. Four sub-traps. The exception is STATUTORY, so the answer flips by industry. Condominium warranties may be cut to one year under § 76-890 (and for a residential unit only by an instrument the purchaser executes), time-shares to two years in writing under § 76-1723, insurance where Chapter 44 prescribes it (Brodine), while Neb. Rev. Stat. § 25-229(2) slams the door for claims against real-estate licensees: “Such two-year period shall not be reduced by agreement”. The clock is not five years just because the contract is written: Reinke Manufacturing Co. v. Hayes sent a claim on a WRITTEN engineering-services contract to § 25-222's two years, holding that “if Reinke's claims are for professional malpractice, whether pled in tort or contract, the statute of limitations for professional negligence contained in § 25-222 applies” and that claims from one professional relationship “may not be separated into various parts to allow different periods of limitation to be applied.” There is no discovery rule for an ordinary contract claim, Pennfield Oil Company v. Winstrom: “A cause of action in contract accrues at the time of the breach or failure to do the thing agreed to, irrespective of any knowledge on the part of the plaintiff or of any actual injury occasioned to him or her.” And Neb. Rev. Stat. § 25-217 dismisses a case BY OPERATION OF LAW, without prejudice, against any defendant not properly served within 180 days of commencement, which no amount of drafting can cure. THE ESCAPE HATCH IS THE CHOICE-OF-LAW CLAUSE, NOT THE LIMITATIONS CLAUSE. Because the Nebraska rule is a domestic public-policy rule, a contract validly governed by another state's law carries that state's treatment into a Nebraska court: Dunlop says so, and Rose v. American Family Ins. Co. enforced an Iowa policy's two-year limitation in 2023 on exactly that footing. But § 44-357 forecloses that route for a policy issued in Nebraska.
26 authorities
- statuteNeb. Rev. Stat. § 25-205enactment date not established
The words that state the rule
Except as provided in subsection (2) of this section, an action upon a specialty, or any agreement, contract, or promise in writing, or foreign judgment, can only be brought within five years.
- statuteNeb. Rev. Stat. § 25-206enactment date not established
The words that state the rule
An action upon a contract, not in writing, expressed or implied, or an action upon a liability created by statute, other than a forfeiture or penalty, can only be brought within four years.
- statuteNeb. Rev. Stat. § 25-222enactment date not established
The words that state the rule
Any action to recover damages based on alleged professional negligence or upon alleged breach of warranty in rendering or failure to render professional services shall be commenced within two years next after the alleged act or omission in rendering or failure to render professional services providing the basis for such action; Provided, if the cause of action is not discovered and could not be reasonably discovered within such two-year period, then the action may be commenced within one year from the date of such discovery or from the date of discovery of facts which would reasonably lead to such discovery, whichever is earlier; and provided further, that in no event may any action be commenced to recover damages for professional negligence or breach of warranty in rendering or failure to render professional services more than ten years after the date of rendering or failure to render such professional service which provides the basis for the cause of action.
- statuteNeb. Rev. Stat. § 25-223enactment date not established
The words that state the rule
Any action to recover damages based on any alleged breach of warranty on improvements to real property or based on any alleged deficiency in the design, planning, supervision, or observation of construction, or construction of an improvement to real property, except improvements to real property subject to the Nebraska Condominium Act, shall be commenced within four years after any alleged act or omission constituting such breach of warranty or deficiency. If such cause of action is not discovered and could not be reasonably discovered within such four-year period, or within one year preceding the expiration of such four-year period, then the cause of action may be commenced within two years from the date of such discovery or from the date of discovery of facts which would reasonably lead to such discovery, whichever is earlier. In no event may any action be commenced to recover damages for an alleged breach of warranty on improvements to real property or deficiency in the design, planning, supervision, or observation of construction, or construction of an improvement to real property more than ten years beyond the time of the act giving rise to the cause of action.
- statuteNeb. Rev. Stat. § 25-229enactment date not established
The words that state the rule
Any action to recover damages based on any act or omission of a real estate licensee relating to real estate brokerage services shall be commenced within two years after whichever of the following occurs first with respect to such brokerage services: (a) A transaction is completed or closed; (b) an agency agreement is terminated; or (c) an unconsummated transaction is terminated or expires. Such two-year period shall not be reduced by agreement and shall not apply to disciplinary actions initiated by the State Real Estate Commission.
- statuteNeb. Rev. Stat. § 76-890enactment date not established
The words that state the rule
A judicial proceeding for breach of any obligation arising under section 76-887 or 76-888 must be commenced within two years after the cause of action accrues, but the parties may agree to reduce the period of limitation to not less than one year. With respect to a unit that may be occupied for residential use, an agreement to reduce the period of limitation must be evidenced by an instrument executed by the purchaser.
- statuteNeb. Rev. Stat. § 76-1723enactment date not established
The words that state the rule
A judicial proceeding in which the accuracy of the public-offering statement or validity of any contract of purchase is in issue or in which a rescission of the contract or damages is sought shall be commenced within four years after the date of the contract of purchase, notwithstanding that the purchaser's terms of payments may extend beyond the period of limitation except that, with respect to the enforcement of provisions in the contract of purchase which require the continued furnishing of services and the reciprocal payments to be made by the purchaser, the period for bringing a judicial proceeding will continue for a period of four years for each breach, but the parties may agree in writing to reduce the period of limitation to not less than two years.
- statuteNeb. Rev. Stat. § 44-357enactment date not established
The words that state the rule
No insurance company shall issue in this state any policy or contract of insurance containing a provision, stipulation or agreement that such policy shall be construed according to the laws of any other state or country, or any provision limiting the time within which an action may be brought to less than the regular period of time prescribed by the statutes of limitations of this state, unless otherwise prescribed by this chapter.
The words that state the rule
action shall be brought thereon, or for a breach thereof, unless within a time therein specified, which is different from the time which the statute fixes for bringing an action on such contract, or for a breach thereof, is against public policy, and will not be enforced by the courts of this state.
- case102 N.W. 246Grand View Building Ass'n v. Northern Assurance Co.Neb.decided 1905read it at the source ↗
The words that state the rule
We are entirely satisfied with both the reasoning and conclusions in those cases. A man may not by contract deprive himself of the right to apply to the courts for the protection of his person, property or liberty in the manner or within the time prescribed by public law. Otherwise he might be permitted to sell himself into servitude.
The words that state the rule
By the petition was pleaded a cause of action based upon a written guaranty entered into in the State of Nebraska seeking in the courts of Nebraska enforcement of an obligation pursuant to an agreement which extended the limitation upon the right to maintain action for recovery beyond the period fixed by the statutes of Nebraska. The attempt to so extend the right was void.
The words that state the rule
This rule of course does not apply to a valid contract entered into in a foreign state.
- case205 N.W.2d 640Wulf v. Farm Bureau Insurance Co. of NebraskaNeb.decided 1973read it at the source ↗
The words that state the rule
It therefore becomes abundantly clear that the limitation period with reference to the other coverages besides fire and lightning contravenes the prohibition of section 44-357, R. R. S. 1943, and any such provision limiting the time within which an action may be brought to less than the regular period of time prescribed by the statute of limitations in this state is invalid.
The words that state the rule
we conclude in this case that the general 5-year statute of limitations must yield to the 3-year provision in the Blue Cross policy because such provision is authorized by the statutes regulating health insurance policies.
The words that state the rule
Therefore, if Reinke’s claims are for professional malpractice, whether pled in tort or contract, the statute of limitations for professional negligence contained in § 25-222 applies.
The words that state the rule
If all of Reinke’s claims are based on a single professional relationship, however, they may not be separated into various parts to allow different periods of limitation to be applied.
The words that state the rule
A cause of action in contract accrues at the time of the breach or failure to do the thing agreed to, irrespective of any knowledge on the part of the plaintiff or of any actual injury occasioned to him or her.
The words that state the rule
Although we have determined that contractual limita- tion periods shorter than Nebraska statutory periods are not enforceable for policies issued in Nebraska, such provisions will be enforced in Nebraska when they appear in contracts entered into in other states.
- statuteNeb. Rev. Stat. § 25-217enactment date not established
The words that state the rule
Each defendant in the action must be properly served within one hundred eighty days of the commencement of the action.
- statuteNeb. Rev. Stat. § 25-217enactment date not established
The words that state the rule
If any defendant is not properly served within the time specified by subsection (2) of this section then the action against that defendant is dismissed by operation of law. The dismissal is without prejudice and becomes effective on the day after the time for service expires.
The words that state the rule
The policy provided that the insurance company should not be liable for any loss thereunder unless a suit for such loss was brought within six months of the date of the loss or damage, any statute of limitations to the contrary notwithstanding.
- statuteNeb. Rev. Stat. § 25-223enactment date not established
The words that state the rule
Any action to recover damages based on any alleged breach of warranty on improvements to real property or based on any alleged deficiency in the design, planning, supervision, or observation of construction, or construction of an improvement to real property that is a condominium or part of a condominium project subject to the Nebraska Condominium Act shall be commenced within two years after any alleged act or omission constituting such breach of warranty or deficiency.
The words that state the rule
The statutes of this state provide in what time actions may be brought; and a contract which provides that no action shall be brought thereon, or for a breach thereof, unless within a time therein specified, which is different from the time which the statute fixes for bringing an action on such contract or for a breach thereof, is against public policy
The words that state the rule
The limitation of the Nebraska statute is 5 years and the pleaded limitation of the New York statute is 6 years.
- case872 N.W.2d 794Intervision Sys. Techs. v. InterCallNeb. Ct. App.decided 2015read it at the source ↗
The words that state the rule
However, we must interpret this state’s prescription on contractual modifications to statutes of limitations literally and narrowly in light of Nebraska’s strong general rule that courts will not “‘“‘“emasculate the liberty of contract by enabling parties to escape their con- tractual obligations on the pretext of public policy unless the - 366 - Decisions of the Nebraska Court of A ppeals 23 Nebraska A ppellate R eports INTERVISION SYS. TECHS. v. INTERCALL Cite as 23 Neb. App. 360 preservation of the public welfare imperatively so demands. . . .”’”’” Jeffrey Lake Dev. v. Central Neb. Pub. Power, 262 Neb. 515, 523, 633 N.W.2d 102, 109 (2001). Accordingly, we do not find the Nebraska Supreme Court’s policy pronounce- ment against contractual modifications to statutes of limita- tions to be broad enough to encompass the notice provision at issue here.
- case872 N.W.2d 794Intervision Sys. Techs. v. InterCallNeb. Ct. App.decided 2015read it at the source ↗
The words that state the rule
We find that the notice of claim clause in the contract is not a statute of limitations clause and is valid and enforceable.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.