One-year contract limit bars Unfair and Deceptive Trade Practices Act claim

The North Carolina Supreme Court held that a contractual provision requiring claims to be filed within one year was enforceable against a claim under the state’s Unfair and Deceptive Trade Practices Act (UDTPA), reversing the North Carolina Court of Appeals and reinstating summary judgment for the defendant.

The case arose after the plaintiffs’ home suffered major water damage and they hired the defendant, a remediation company, to perform repair work. The contract, signed by one of the plaintiffs, stated in clear language that any claim related to the agreement had to be brought within one year from the time the claimant knew or should have known of the cause of action. The plaintiffs later alleged the defendant failed to perform the promised remediation, leading to the eventual demolition of the home. But they did not file their UDTPA claim until nearly three years after discovering the alleged misconduct.

A Mecklenburg County Superior Court enforced the contractual limitations provision and granted summary judgment to the defendant. The Court of Appeals reversed, concluding that allowing parties to shorten the UDTPA’s four-year statute of limitations by contract would undermine the statute’s consumer-protection purpose.

The Supreme Court disagreed. It said contractual provisions shortening the time to sue are generally enforceable so long as no statute forbids them and the shortened period is reasonable. The court found no language in the UDTPA prohibiting parties from agreeing to a shorter filing deadline. It rejected the argument that such a ban could be inferred from the statute’s broader public policy goals, emphasizing that courts must apply statutes as written rather than add restrictions the legislature did not include.

The court also found the one-year period reasonable. The provision appeared in bold, conspicuous language, and the plaintiffs did not contend they were coerced into signing the contract. Because the plaintiffs sued outside the agreed period, the court held their claim was time-barred.

The 24 page opinion is Warren v. Cielo Ventures Inc., Lawyers Weekly No. 010-008-26.