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  • Statute of Limitations for Payment Collections

    Hopefully some of the experts who deal with contracts can give me some tips
    on this..

    A job was completed in May 2003, and (for logical reasons too much to
    explain) was not invoiced until April 2005.

    I understand that normally there is a 2 year period after which no
    collection/legal action can be taken. What I'm wondering is, in this case,
    does this two year period start at the completion of the job or when the
    invoice was sent?

    Any comments or references to legal sources is greatly appreciated!

    Fred




  • #2
    Statute of Limitations for Payment Collections


    "Fred" <[email protected]> wrote in message
    news:[email protected]
    Hopefully some of the experts who deal with contracts can give me some tips on this.. A job was completed in May 2003, and (for logical reasons too much to explain) was not invoiced until April 2005. I understand that normally there is a 2 year period after which no collection/legal action can be taken. What I'm wondering is, in this case, does this two year period start at the completion of the job or when the invoice was sent?
    Statutes of limitations are normally set by state law, but since you don't
    mention that state, can't give a specific answer. That said, I believe most
    states' SOL for collection of a debt run longer than two years. In TX, it's
    four years and some states' SOLs run much longer.


    Comment


    • #3
      Statute of Limitations for Payment Collections

      "Fred" <[email protected]> wrote in message
      news:[email protected]
      Hopefully some of the experts who deal with contracts can give me some tips on this.. A job was completed in May 2003, and (for logical reasons too much to explain) was not invoiced until April 2005. I understand that normally there is a 2 year period after which no collection/legal action can be taken. What I'm wondering is, in this case, does this two year period start at the completion of the job or when the invoice was sent? Any comments or references to legal sources is greatly appreciated!
      The Statute of limitations begins to run at the time of breach. That's the
      first moment the plaintiff has the right to sue. If the customer had an
      obligation to pay at the time of completion regardless of whether an invoice
      had been received, the statute started to run at that time. If it would not
      have been possible for the seller to sue the buyer at the time of completion
      because an invoice was required, then the breach didn't occur until after
      the invoice was sent and received. If that's the case, the statute started
      to run at that time. Whether an invoice was required depends on two things.
      First, what did the contract say about an invoice. Second, was the amount
      owed known by the buyer without an invoice.

      You said the statute of limitations period is two years in your state. But
      you didn't say it in a way that makes me think you actually know. I don't
      think you would be wise to assume you know the answer based on common
      knowledge. You should either look it up or tell us what state you are in.
      Or, here's an even better idea. Sue the buyer now. Let the buyer figure
      out whether the suit is barred by the statute of limitations. Then look it
      up. It would be embarrassing if you spend a few days in research only to
      find out the statute of limitations ran out while you were doing the
      research.

      This answer must not be relied on as legal advice for the reasons posted
      here: http://mcgyverdisclaimer.blogspot.com

      McGyver

      misc.legal


      Comment


      • #4
        Statute of Limitations for Payment Collections

        Two contracts -- one is governed by Wyoming and other by Colorado law.

        "Zen Cohen" <[email protected]> wrote in message
        news:K0N8g.12849[email protected]
        "Fred" <[email protected]> wrote in message news:[email protected]
        Hopefully some of the experts who deal with contracts can give me some tips on this.. A job was completed in May 2003, and (for logical reasons too much to explain) was not invoiced until April 2005. I understand that normally there is a 2 year period after which no collection/legal action can be taken. What I'm wondering is, in this case, does this two year period start at the completion of the job or when the invoice was sent?
        Statutes of limitations are normally set by state law, but since you don't mention that state, can't give a specific answer. That said, I believe
        most
        states' SOL for collection of a debt run longer than two years. In TX,
        it's
        four years and some states' SOLs run much longer.


        Comment


        • #5
          Statute of Limitations for Payment Collections

          Thanks, McG! See below....

          "McGyver" <[email protected]> wrote in message
          news:[email protected]
          "Fred" <[email protected]> wrote in message news:[email protected]
          Hopefully some of the experts who deal with contracts can give me some tips on this.. A job was completed in May 2003, and (for logical reasons too much to explain) was not invoiced until April 2005. I understand that normally there is a 2 year period after which no collection/legal action can be taken. What I'm wondering is, in this case, does this two year period start at the completion of the job or when the invoice was sent? Any comments or references to legal sources is greatly appreciated!
          The Statute of limitations begins to run at the time of breach. That's
          the
          first moment the plaintiff has the right to sue. If the customer had an obligation to pay at the time of completion regardless of whether an
          invoice
          had been received, the statute started to run at that time. If it would
          not
          have been possible for the seller to sue the buyer at the time of
          completion
          because an invoice was required, then the breach didn't occur until after the invoice was sent and received. If that's the case, the statute
          started
          to run at that time. Whether an invoice was required depends on two
          things.
          First, what did the contract say about an invoice. Second, was the amount owed known by the buyer without an invoice.
          The contract says payment terms are Net 30 days after receipt of invoice.
          You said the statute of limitations period is two years in your state.
          But
          you didn't say it in a way that makes me think you actually know. I don't
          Thanks for the comment..... I actually spoke too soon. My state is
          California, where, last time I checked - 5 years ago - it was 2 years.
          However, these two contracts are governed by Colorado and Wyoming law.
          think you would be wise to assume you know the answer based on common knowledge. You should either look it up or tell us what state you are in. Or, here's an even better idea. Sue the buyer now. Let the buyer figure out whether the suit is barred by the statute of limitations. Then look
          it
          up. It would be embarrassing if you spend a few days in research only to find out the statute of limitations ran out while you were doing the research.
          Not a problem here. If it were the 1 year and 364th day, I would be in an
          attorney's office asking questions - not posting on the internet.
          This answer must not be relied on as legal advice for the reasons posted here: http://mcgyverdisclaimer.blogspot.com McGyver misc.legal

          Comment

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