Agreements to Alter the Limitation Period Imposed by U.C.C. Section 2-725: Some Overlooked Complications

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Title

Agreements to Alter the Limitation Period Imposed by U.C.C. Section 2-725: Some Overlooked Complications

Description

Uniform Commercial Code Section 2-725 sets forth the Statute of Limitations that is applicable to U.C.C. Article 2 sale-of-goods transactions. There is a fairly extensive body of literature that analyzes the numerous problems and litigation that this poorly drafted provision has created. However, such commentary overlooks several ambiguities presented by Section 2-725(1) with regard to agreements to depart from the provision’s four-year limitation period default rule. This brief article will attempt to resolve these ambiguities.

Starting from the conventional premise that a statute’s ambiguities should be interpreted so as to maximize the contractual freedom of the parties that are subject to that statute, absent compelling reasons otherwise, Section 2-725(1) should be interpreted to give effect not only to those agreements that impose symmetrical limitation periods within the permitted statutory range, but also to asymmetric agreements that impose different limitation periods upon the various parties to a contract, so long as all of the limitation periods fall within the statutorily permitted one-year to four-year range. Second, symmetrical agreements that establish a limitation period that lies outside of this permitted statutory range, and asymmetric agreements that impose one or more limitation periods that lie outside of that range, while clearly unenforceable under Section 2-725(1), should nevertheless be regarded as providing clear evidence of the parties’ joint intent—and should therefore be given effect to the extent that the provision permits.

Creator

Gregory Crespi

Publisher

St. Mary's Law Journal, St. Mary's University School of Law

Date

2015

Contributor

St. Mary's University School of Law

Rights

Copyright to author Gregory Crespi

Relation

St. Mary's Law Journal

Format

RFC3778

Language

English, en-US

Type

Text

Identifier

Crespi_Step11_Final_V2.pdf

Files

Crespi_Step11_Final_V2.pdf

Citation

Gregory Crespi , “Agreements to Alter the Limitation Period Imposed by U.C.C. Section 2-725: Some Overlooked Complications ,” St. Mary's Law Digital Repository, accessed June 28, 2017, http://lawspace.stmarytx.edu/item/Crespi_Step11_Final_V2.pdf.

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