How long do we have to sue on this contract in Virginia, and can the contract change it?
Five years on a signed writing, three otherwise, running from the breach. Va. Code § 8.01-246(A) sets the clock against accrual: “actions founded upon a contract, other than actions on a judgment or decree, shall be brought within the following number of years next after the cause of action shall have accrued”. Subdivision (A)(2) gives five years “In actions on any contract that is not otherwise specified and that is in writing and signed by the party to be charged thereby, or by his agent, within five years whether such writing be under seal or not”; subdivision (A)(4) gives three years “In actions upon (i) any contract that is not otherwise specified and that is in writing and not signed by the party to be charged, or by his agent, or (ii) any unwritten contract, express or implied, within three years”. The clock starts at breach, not at discovery: under § 8.01-230 the right of action accrues and the period begins to run “when the breach of contract occurs in actions ex contractu and not when the resulting damage is discovered”, except where the relief sought is solely equitable or another named statute applies. Subdivision (A)(3) puts partnership-account and merchant-to-merchant account actions at five years “from the cessation of the dealings in which they are interested together”: a different starting point from breach. A promise not to plead the statute is tightly controlled: first, “Whenever the failure to enforce a promise, written or unwritten, not to plead the statute of limitations would operate as a fraud on the promisee, the promisor shall be estopped to plead the statute”; in all other cases an unwritten one “shall be void”, and a written one is valid “only when (i) the written promise is made to avoid or defer litigation pending settlement of any cause of action that has accrued in favor of the promisee against the promisor, (ii) the written promise is signed by the promisor or his agent, and (iii) the promisee commences an action asserting such cause of action within the earlier of (a) the applicable limitations period running from the date the written promise is made or (b) any shorter time as may be provided in the written promise” (§ 8.01-232(A)). Contract language is read strictly against waiver, and the leading case shows how strictly. In Hensel Phelps the Supreme Court of Virginia held that “a general incorporation provision is insufficient to expressly waive a limitations period, as it does not expressly acknowledge the right to a limitations period or intent to waive that right”, and that flow-down language binding a subcontractor “by the same terms and conditions by which Contractor is bound to [Virginia Tech] under the Contract”, together with a warranty running until the contractor's release, “do not demonstrate sufficient intent to incorporate a waiver of the statute of limitations”. The contractor lost: the Court affirmed the circuit court, the claims having accrued between the start of construction in 1997 and completion of the project in 1998, or at the 2000 repair work, and the suit not being filed until 2014. Note also what did NOT flow down: the reason no limitations period ran against the owner was § 8.01-231, which applies to the Commonwealth and its agency, not any term of the contract documents. Two of the section's own subsections take contracts out of that five-or-three answer entirely. Subsection C: “In the case of any action to which § 8.2-725 of the Uniform Commercial Code is applicable, that section shall be controlling except that in products liability actions for injury to person and for injury to property, other than the property subject to contract, the limitation prescribed in § 8.01-243 shall apply.” So a contract for the sale of goods is not on the five-year track at all, however carefully it is signed. And subsection B bars an action on a signed written contract “to collect medical debt” unless commenced “within three years from the due date applicable to the final invoice for a health care service”, unless the contract with a hospital or health care provider is a payment plan allowing longer, and on breach of such a plan the three years runs “from the date of breach by the debtor”. That medical-debt rule has its own definition (“medical debt” means a debt arising directly from the receipt of a health care service and originally owed directly to a health care service provider) and its own floor: it does “not apply to medical debt arising from services paid for under programs administered by the Department of Medical Assistance Services.”
The trap
Four Virginia-specific things a clause cannot fix. The signature requirement in § 8.01-246(A)(2) is on the party TO BE CHARGED, so a writing the defendant never signed drops the claim from five years to three, and it is the same three years an oral contract gets. And the discovery rule that most limitations arguments assume is not available: § 8.01-230 is explicit that in a contract action the period runs from the breach and not from when the damage is discovered, but § 8.01-230's own exception list points to § 8.01-249, which does run from discovery for fraud, mistake, Consumer Protection Act misrepresentation and rescission for undue influence, and from payment for contribution or indemnification, so a latent defect can be time-barred on the contract count before anyone knows about it. Hensel Phelps is that proposition with a construction project attached: the breaches were placed at the subcontractors' performances between the start of construction in 1997 and completion of the project in 1998, or the repair work in 2000, and the 2014 suit was far too late, against the subcontractors and, derivatively, against their sureties. Third, a flow-down or incorporation-by-reference clause is not a waiver of the statute. An express waiver has to show both knowledge of the right and intent to relinquish it, and a general incorporation provision shows neither; nor does a clause binding the subcontractor to the same terms and conditions as the prime contract, even where the owner itself faced no limitations period at all, because that immunity came from § 8.01-231 and the Commonwealth's status, not from the contract. Note also § 8.01-232(D), which carves public-body construction, construction-management, design-build, architecture and engineering subcontracts out of subsections A and C for waivers or promises not to plead, but only as to demands, claims or actions asserted under such contracts BY A PUBLIC BODY. Fourth, and it is the one a commercial drafter is most likely to hit: § 8.01-246 does not govern a sale of goods. Subsection C makes § 8.2-725 of the Uniform Commercial Code controlling for any action to which it applies, so the five-year figure for a signed writing is simply the wrong number for a supply agreement. NOT HELD: the text of § 8.2-725 itself was not available for review, the Virginia statutes consulted here carry Title 8.01 and no part of the Commercial Code, so this rule states that the UCC section controls and does not state what period it sets.
19 authorities
- statuteVa. Code § 8.01-246enacted 2024
The words that state the rule
2. In actions on any contract that is not otherwise specified and that is in writing and signed by the party to be charged thereby, or by his agent, within five years whether such writing be under seal or not;
- statuteVa. Code § 8.01-246enacted 2024
The words that state the rule
4. In actions upon (i) any contract that is not otherwise specified and that is in writing and not signed by the party to be charged, or by his agent, or (ii) any unwritten contract, express or implied, within three years.
- statuteVa. Code § 8.01-246enacted 2024
The words that state the rule
C. In the case of any action to which § 8.2-725 of the Uniform Commercial Code is applicable, that section shall be controlling except that in products liability actions for injury to person and for injury to property, other than the property subject to contract, the limitation prescribed in § 8.01-243 shall apply.
- statuteVa. Code § 8.01-230enacted 1996
The words that state the rule
§ 8.01-230 . Accrual of right of action. In every action for which a limitation period is prescribed, the right of action shall be deemed to accrue and the prescribed limitation period shall begin to run from the date the injury is sustained in the case of injury to the person or damage to property, when the breach of contract occurs in actions ex contractu and not when the resulting damage is discovered, except where the relief sought is solely equitable or where otherwise provided under § 8.01-233 , subsection C of § 8.01-245 , §§ 8.01-249 , 8.01-250 or other statute.
- statuteVa. Code § 8.01-232enacted 2022
The words that state the rule
In all other cases, an unwritten promise not to plead the statute shall be void, and a written promise not to plead such statute shall be valid and enforceable to prevent assertion of the defense of the statute only when (i) the written promise is made to avoid or defer litigation pending settlement of any cause of action that has accrued in favor of the promisee against the promisor, (ii) the written promise is signed by the promisor or his agent, and (iii) the promisee commences an action asserting such cause of action within the earlier of (a) the applicable limitations period running from the date the written promise is made or (b) any shorter time as may be provided in the written promise. No provision of this subsection shall operate contrary to subsections B and C.
- case292 Va. 695Hensel Phelps Construction Co. v. Thompson Masonry Contractor, Inc.Va.decided 2016read it at the source ↗
The words that state the rule
In addition, Hensel Phelps points to specific phrases in the subcontract that it alleges unambiguously demonstrate intent to waive the statute of limitations, such as the statement that “[t]he Subcontractor is bound to the Contractor by the same terms and conditions by which Contractor is bound to [Virginia Tech] under the Contract,” and that the subcontractor’s warranty period covers any time “prior to Contractor’s release from responsibility to [Virginia Tech] therefor as required by the Contract Documents.” These provisions similarly fail to expressly indicate “knowledge of” and “intent to relinquish” the subcontractors’ right to a limitations period. May, 205 Va. at 404, 137 S.E.2d at 865 (internal citation omitted). We therefore hold that the various identified phrases do not demonstrate sufficient intent to incorporate a waiver of the statute of limitations.
- statuteVa. Code § 8.01-246enacted 2024
The words that state the rule
B. In any action, including those brought by the Commonwealth, upon any contract under subdivision A 2 or 4 to collect medical debt, such an action is barred if not commenced within three years from the due date applicable to the final invoice for a health care service unless the contract with a hospital or health care provider is for a payment plan that allows for a longer period of time for the collection of debt by the hospital or health care provider.
- statuteVa. Code § 8.01-246enacted 2024
The words that state the rule
For the purposes of this subsection, "medical debt" means a debt arising directly from the receipt of a health care service and originally owed directly to a health care service provider. The provisions of this subsection shall not apply to medical debt arising from services paid for under programs administered by the Department of Medical Assistance Services.
- statuteVa. Code § 8.01-246enacted 2024
The words that state the rule
3. In actions by a partner against another for settlement of the partnership account or in actions upon accounts concerning the trade of merchandise between merchant and merchant, their factors, or servants, within five years from the cessation of the dealings in which they are interested together;
- statuteVa. Code § 8.01-232enacted 2022
The words that state the rule
A. Whenever the failure to enforce a promise, written or unwritten, not to plead the statute of limitations would operate as a fraud on the promisee, the promisor shall be estopped to plead the statute.
- statuteVa. Code § 8.01-232enacted 2022
The words that state the rule
D. Subsections A and C shall not apply to, limit, or prohibit written promises to waive or not to plead the statute of limitations that are made in, or contemporaneously with, subcontracts of any tier that are related to contracts for construction, construction management, design-build, architecture, or engineering under Chapter 43 (§ 2.2-4300 et seq.) or 43.1 (§ 2.2-4378 et seq.) of Title 2.2; under the policies and procedures adopted by any county, city, or town or school board; under Title 23.1; or under authorizing provisions, policies, or procedures for procurement of such contracts by any public body exempted from the foregoing; however, such waiver or promise not to plead applies only to demands, claims, or actions asserted under such contracts by a public body. As used in this subsection, "subcontract" includes any contract or purchase order to supply labor, equipment, materials, or services to an entity awarded a contract with a public body or to any lower-tier entity performing work provided for in such a contract.
- statuteVa. Code § 8.01-246enacted 2024
The words that state the rule
A. Subject to the provisions of § 8.01-243 regarding injuries to person and property and of § 8.01-245 regarding the application of limitations to fiduciaries, and their bonds, actions founded upon a contract, other than actions on a judgment or decree, shall be brought within the following number of years next after the cause of action shall have accrued:
- statuteVa. Code § 8.01-246enacted 2024
The words that state the rule
In the event of breach of a payment plan, an action is barred if not commenced within three years from the date of breach by the debtor.
- case292 Va. 695Hensel Phelps Construction Co. v. Thompson Masonry Contractor, Inc.Va.decided 2016read it at the source ↗
The words that state the rule
An express waiver must reflect both elements: knowledge of the right’s existence and the intent to relinquish it. While the subcontracts incorporate the prime 4 contract by reference, a general incorporation provision is insufficient to expressly waive a limitations period, as it does not expressly acknowledge the right to a limitations period or intent to waive that right.
- case292 Va. 695Hensel Phelps Construction Co. v. Thompson Masonry Contractor, Inc.Va.decided 2016read it at the source ↗
The words that state the rule
Furthermore, the prime contract itself did not expressly waive the statute of limitations by contracting for an unlimited limitations period. Rather, it is Code § 8.01-231, applicable to the Commonwealth and its agency, Virginia Tech, and not any of the contract documents that provided that no limitations period could be applicable as against the Commonwealth.
- case292 Va. 695Hensel Phelps Construction Co. v. Thompson Masonry Contractor, Inc.Va.decided 2016read it at the source ↗
The words that state the rule
We therefore conclude that the right of action accrued upon breach of the performance provisions of the contract at some point between the commencement of construction in 1997 and completion of the project in 1998, or the repair work in the year 2000, and that the statute of limitations had thus long run by the filing of the suit in 2014. Because any breach by the subcontractors occurred at the time of their respective performances, the statute of limitations has similarly run against their sureties. III. CONCLUSION For the aforementioned reasons, we will affirm the judgment of the circuit court. Affirmed.
- statuteVa. Code § 8.01-249enactment date not established
The words that state the rule
1. In actions for fraud or mistake, in actions for violations of the Consumer Protection Act (§ 59.1-196 et seq.) based upon any misrepresentation, deception, or fraud, and in actions for rescission of contract for undue influence, when such fraud, mistake, misrepresentation, deception, or undue influence is discovered or by the exercise of due diligence reasonably should have been discovered;
- statuteVa. Code § 8.01-249enactment date not established
The words that state the rule
5. In actions for contribution or for indemnification, when the contributee or the indemnitee has paid or discharged the obligation.
- case292 Va. 695Hensel Phelps Construction Co. v. Thompson Masonry Contractor, Inc.Va.decided 2016read it at the source ↗
The words that state the rule
Today’s ruling is consistent with the Commonwealth’s larger statutory scheme, which relies on accrual of a right of action upon breach rather than upon discovery on most contract actions in the interest of finality. See Code § 8.01-230. Specific indemnification language within a subcontract would result in a later-accruing statute of limitations, as expressed in Code § 8.01-249(5).
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.