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Real Property — Civil Practice – Statute of Repose – Express Warranty – Waiver

Christie v. Hartley Construction, Inc. (Lawyers Weekly No. 14-06-1206, 13 pp.) (Robert Edmunds Jr., J.) (Robert Hunter, J., not participating) Appealed from Orange County Superior Court (Gary Trawick, J.) On appeal from the Court of Appeals. N.C. S. Ct.

Holding: When a defendant warranted its exterior cladding product for 20 years, defendant waived the protections provided by our six-year statute of repose. Defendant is bound by its contract.

We reverse the Court of Appeals’ determination that plaintiffs could not sue for damages and were limited to specific performance under the warranty.

Statutes of repose are intended to mitigate the risk of inherently uncertain and potentially limitless legal exposure. G.S. § 1-50(a)(5), triggered by a defendant’s last act or omission, provides that any claim relating to any “improvement to real property” must be brought within six years.

Yet North Carolina has long recognized that parties generally are free to contract as they deem appropriate. Thus, we are faced with a conflict between the public policy embodied in the repose period set out in § 1-50(a)(5) and the right of parties to contract freely.

We see no public policy reason why the beneficiary of a statute of repose cannot bargain away the statute’s benefit. A business marketing its products may reasonably conclude that offering a warranty giving customers protection exceeding the repose period will provide an edge over its competitors.

Here, the manufacturer of an exterior cladding product knowingly and freely entered into a contract of sale with plaintiffs in which the manufacturer bargained away the protections of the statute of repose. The contract provided for a warranty of 20 years. That warranty stands in its entirety.

Affirmed in part, reversed in part and remanded. Discretionary review improvidently allowed in part.

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