Prompted by both the need to bring matters to final conclusions and to avoid lawsuits involving stale claims, the law usually limits the time within which suits may be brought. This is generally through "statutes of limitations" adopted by legislative bodies.
The deadlines for bringing particular suits vary, usually depending upon the nature of the claim. For example, Colorado limitation periods run generally from six months for certain types of claims through as long as ten years. Most of the usual types of contract and injury claims are governed by a six-year statute of limitations.
The limitation periods usually start to run from the date of occurrence or discovery of the problem. Under certain circumstances the limitation period is stopped (tolled) when parties are legally incapacitated (under-age, mentally incompetent, absent from the state, and the like).
In addition to the statutory time limitations, parties may themselves fix deadlines for commencement of suits or other legal proceedings in their contracts. Such provisions are usually enforceable unless they are patently unreasonable.
Persons involved in the construction industry should be particularly aware of a number of limitation periods specifically affecting them. Colorado has a statute limiting the time for suits against contractors and design professionals to two years following the injury but, in no event, later than ten years after substantial completion of the construction work.
That statute has been interpreted only to apply to claims of third parties -not to claims among and between the contracting parties and parties related to them. For example, a person struck by a brick which fell from a building because of faulty installation may sue the parties responsible only within two years after the accident but cannot sue if substantial completion occurred more than ten years before the accident. On the other hand, the owner who contracted for the brick work has six years after discovery of the faulty masonry work within which to sue.
1 Since this was published this distinction has been abolished. See, "Time to Sue" preceding Brief.
E-61 Other limitation on periods affecting the construction industry involve those dealing with mechanic's liens. For example, in Colorado a mechanic's lien suit must be commenced within six months following substantial completion of the construction project involved. Prior to that date, and within specified deadlines, the mechanic's lien claimant must have served a notice of intent and filed a mechanic's lien statement in the office of the Clerk and Recorder of the county where the property is located.
Deadlines fixed by contracts affecting the construction industry usually involve such matters as time limitations for commencing arbitration proceedings, appeals to higher contracting authorities over disputes on public construction work, and limitations for commencing suits on surety bonds. There are certain instances where parties sued cannot rely upon limitations. An example is where that party, by words or conduct, has waived the right to enforce time limitations.
Limitations for suits on surety bonds may also be limited by statute, such as the Colorado Public Contractor's Bond Statute which require commencement of suit on the bond within six months following substantial completion. Under the comparable federal statute, the Miller Act, suit must be commenced within one year after the claimant last furnished labor or materials.
In dealing with limitation periods it is critical to determine when the time commenced to run and to properly measure how much time the claimant has. Failure to assert a claim on time usually results in a loss of that claim -regardless of its validity.
It is therefore imperative that persons having claims determine precisely any limitation periods governing the time within which they must act. This does not necessarily mean that they have to race to the courthouse before exhausting efforts to settle their claims without legal proceedings. It does, however, mean that they must determine any limitation which would apply to commencement of their legal proceedings.
Parties against whom claims are made should likewise determine whether proceedings to recover upon those claims have been timely commenced. If not, they may have the claims dismissed.
Careful observance of applicable deadlines will avoid serious problems and cannot be overemphasized.
Update note: The Colorado limitation periods have also been drastically changed. Consult statutory amendments or your lawyer.