Litigation is made up of multiple steps. Every litigation participant is promised a speedy trial. While the time it takes to get through a case may seem long, it could always take longer. When bringing a case to court a plaintiff has a lot of responsibilities. In an effort to balance the time a plaintiff needs to bring a good case and the time it takes the defendant to defend himself or herself against accusations, each state has time limits set for different types of cases. These time limits are known of statutes of limitations. When you bring a case to court, if you did not follow the technical rules, like the statute of limitations, your case can be cancelled even if it is valid.
Bluefin Wear, Inc. (“Bluefin”) found itself in this situation when it sued Tuesday’s Child Boutique (“Tuesday’s”) in a New York court. Bluefin is a French corporation which manufactures and distributes children's clothing. It sold and delivered various items of children's clothing to Tuesday’s between January 2006 and July 2006, which Tuesdays failed to pay for. As of July 22, 2006, it owed a balance of $44,017.63 to Bluefin. Bluefin sued Tuesday’s for breach of contract because of the lack of payments.
The first issue the court looked to is what statute of limitations applies. Bluefin believes it has six years to bring the case, but Tuesday’s says there is a four year limit. The first issue is for the court to figure out the correct statute of limitations. The court found a statute which called for a six year statute of limitations for breach of contract issue. However, within that same law, it refers to another law, the UCC, which focuses on sales contracts. Because this case is a breach of of a sale of goods contract, it falls under the UCC. Under the UCC, a breach of contract case only has a four year limit.
The next issue is whether the case began within the statute of limitations. Everyone agrees that Bluefin brought the case in June of 2010. The next question is when did the last breach of contract occur. A cause of action accrues when the breach occurs. Here, plaintiff's claim accrued when defendant was required, but failed, to pay the amount indicated on each invoice by its respective due date. The last invoice, as agreed by both parties, was dated March 2006, with the payment due on April 22, 2006. This means that the statute of limitations for plaintiff's claims expired on April 22, 2010, which is, four years after the due date of April 22, 2006 for its last invoice. This meant that the case, which began in June, was brought too late. Therefore the court will never look at the breach of contract issue and Bluefin have no way to recover the money it believes it was owed.
Litigation is complicated and the rules may change depending on the court you are in. Having an attorney can help you bring your best case forward. If you have any contract questions, consider calling our Long Island business lawyer for assistance.
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