Tag Archives: contract litigation attorney

Contract Terms Statute of Limitations Poniatowski Leding Parikh

The Statute of Limitations on a Contract May Be Different Than You Think

Most business and real estate attorneys assume that the statute of limitations on an oral contract is two years, and on a written contract is 4 years. These are boilerplate assumptions that can trap a businessperson or a landlord; they do not always hold true once we delve into the specifics of a case.

We recently represented a borrower in a foreclosure action brought by the lender bank where no payments had been made on the loan for over 4 years, without any remedial or collection action initiated by the lender. The loan had been bundled, sold and assigned several times and with no lender follow up for some unknown reason. The assumption on the part of the borrower was that passing the four-year mark changed the nature of the dispute. So we took a closer look to confirm whether the statute of limitations could serve as a possible defense. We found that not to be the case. The limitations period on a promissory note is 6 years rather than 4:

Pursuant to California Commercial Code Section 3118(a),
an action to enforce an obligation of a party to pay a note payable at a definite time must be commenced within 6 years after the due date or dates stated in the note or, if a due date is accelerated, within 6 years after the accelerated due date.

This is another example of the trap waiting for both experienced and new attorneys faced with a statute of limitations issue, which can often be more complicated than realized at first glance. And this trap is contained not only in the California Code of Civil Procedure but in other statutes as well.
This loan was a leftover from the days of the Great Recession when loans were bundled, sold and assigned to unsuspecting investors without proper due diligence by the investors and rating agencies, and were serviced by loan servicers with less than diligent follow up. We find it incredible that we continue to see cases involving these types of loans 11 years after the Great Recession hit in 2008.

Appellate Court Holds That Attorneys Fees Not Recoverable Even Though Credit Application Contained A “Prevailing Party Attorneys Fees” Clause

business contract transaction agreement signatures

Many businesses rely on a credit application for the terms and conditions of its sales to its customers. Often the credit application is the only document that the customer actually signs. Relying on invoices, purchase orders, bills of lading, delivery tickets and the like that are not signed by the customer in the ordinary course of business will not support an award of attorneys fees in the event of a collection action and judgment. This is true even though these documents may contain a prevailing party attorneys fees clause.  Because the credit application is usually signed by the customer, however, the creditor/seller often successfully relies on the prevailing party attorneys fees clause in the signed credit application for an award of attorneys fees in the event of collection litigation and judgment. Continue reading

To Obtain Summary Judgment On A Contract Dispute, All Elements Of Breach Of Contract, Including Damages, Must Be Established

A plaintiff’s lawyers must think through all possible actions and results before selecting a course of action in commercial contract litigation. Continue reading