Contract May Limit Time for Asserting Claims
Kegler Brown Construction Newsletter August 1, 2000
A recent Court of Appeals case from Montgomery County has ruled that a contractor's claim against the county arising from an unforeseen condition on a sewer project was barred because it was not filed within 60 days of the Engineer's denial of the claim - as required by the contract documents. R.E. Holland Excavating Co. v. Montgomery Cty. (1999), 133 Ohio App. 3d 837.
Despite filing its complaint well within the statute of limitations for contract claims (15 years), the contractor's claim was thrown out of court because the parties had contractually agreed (in the contract documents) to shorten that period to 60 days. The Court repeated the general rule that parties may shorten that period so long as the time period is "reasonable" and went on to specifically rule that the 60 day period in this case was reasonable.
This case means that many more owners (and contractors) will be inserting time limitations in their contract documents and that contractors (and subcontractors) will have to be vigilant in recognizing these clauses and taking timely legal action on their claims.