Two separate and distinct statutes limit the time within which a contractor (or subcontractor) may be sued for deficient work. One is the "statute of limitations", which imposes differing time limits depending on the type of action and when the breach or injury is reasonably discoverable. For example, the time limit for suing for breach of contract is usually six years, and the time limit for suing for negligence is three years; but neither period of limitations begins to run until the injured party knew, or reasonably should have known, of the breach or injury.
The other statute limiting the time for filing lawsuits against contractors is the "statute of repose" which applies to claims for negligent design or construction. The statute of repose sets an outside time limit of six years from substantial completion or occupancy of the project.
The effect of both statutes is to bar recovery of claims where a lawsuit is filed after the time limit imposed by the statute has expired. The main difference is that the statute of limitations sets a time limit which may be significantly extended by circumstances, while the statute of repose sets a definite and unchanging time limit for filing suit. A claim for negligent construction would be barred by the statute of repose after six years from substantial completion or occupancy, even if the injured party had not yet discovered the defect, and even though the statute of limitations had not begun to run.
While the statute of repose applies only to tort claims, such as negligence, there is overlap into contract based claims. For example, a claim for breach of an implied warranty has been held subject to the statute of repose, (even though a claim for breach of express warranty is not). Also the court has held that a claim based on an unintended failure to perform work in accordance with contract requirements, while technically a breach of contract, was really no different from a claim for negligent workmanship and was subject to the statute of repose.
Normally, however, where the obligation breached is one imposed by contract, the statute of limitations, not repose, applies. When the contract statute of limitations applies, the contractor remains exposed to suit for at least six years after the other contracting party discovers, or should have discovered the breach. Where a contract is executed under seal, the period of limitations is extended to twenty years.
This
newsletter is intended to provide general information of interest to the
construction industry. It is not intended to provide specific legal advice or
to address fact specific issues. For that you should consult your legal
counsel. Corwin & Corwin LLP assumes no liability in connection with the
use of this newsletter. The Supreme Judicial Court may consider this material
advertising.
©1992-2001 Corwin & Corwin LLP. All rights reserved