A limitations period is too short when it’s unreasonably short.

Recently, the U.S. Court of Appeals for the Fourth Circuit affirmed the Maryland District Court upholding a one-year contractual limitations period for arbitration.  Along with a separate contractual waiver any trial in a traditional court setting, the plaintiff was SOL when he didn’t demand arbitration within one year. 

The Court reaffirmed its prior holding from a separate 2007 case that, generally, “limitations periods may be shortened by agreement, so long as the limitations period is not unreasonably short.”  Absent the agreement, the plaintiff had three years to file a lawsuit for breach of contract.

See also: When typical limitations don’t apply.

Read, re-read, review, and thoroughly understand your contracts.  It’s often better to reasonably act and be rejected than not act or be too late.

Bracey v. Lancaster Foods LLC, No. 19-1292 (4th Cir. Dec. 16, 2020)

Published On: January 25, 2021

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