Drafting contractual limitation of time to bring lawsuit July 15, 2026

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Drafting contractual limitation of time to bring lawsuit
July 15, 2026

Drafting contractual limitation of time to bring

   All lawsuits, whether in contract, tort [negligence] warranty or other claims must be brought within certain time periods called the statute of limitations. The time period is set by statutes in each state and by federal law for claims arising under federal law. The reason for a limitation of time is that matters should be brought while issues are fresh, parties are around, witnesses are available, and records are preserved or other public policy reasons. Typically breach of contract actions need to be commenced within 4 to 6 years, negligence cases within 3 years and other types of claims within other time periods. The time starts running when a breach occurs for contracts and when an occurrence happens in a tort situation.
   Parties can agree to shorten the time within which to bring an action as long as the contract provision doesn’t violate a statute prohibiting the shortening, the time period renders the contract unconscionable or other public policy issues, such as case law where courts have rejected provisions or time periods, establishing precedent in the jurisdiction.
   All the Standard Form Agreements have a provision shortening the time to bring a lawsuit. The older version contracts shortened time only for the subscriber suing the alarm company, but the Standard Form Agreements now provide that the provision is mutual. That has worked against alarm companies who waited too long to sue their subscriber for breaching the contract, so be mindful of what you’ve agreed to be prepared to abide by the contract. The reason for shortening the time to bring a lawsuit is obvious, you want to be able to move on without worrying about past claims.
   If you aren’t careful drafting the provision you will find that it’s not enforceable. Theoretically a poorly drafted limitation period could taint the entire contract, and sloppy drafting is usually not limited to a single sentence in a contract. How careful you need to be, and attuned to your state’s position is well illustrated by a case in which AT&T was sued in Texas Federal Court. Edn Global, Inc. and Jerome Edmondson, Plaintiffs, v At&T Mobility Services, LLC Here are the facts described by the Court:
   “In 2012, Congress created the FirstNet Authority within the United States Department of Commerce to oversee the creation and delivery of a nationwide public safety broadband network. The FirstNet Authority awarded AT&T a contract to build out the infrastructure and sell its services to first responders. AT&T hired “Solutions Providers” to help sell its services to public sector agencies. AT&T and EDN entered the 2018 Alliance Agreement (Agreement) effective January 22, 2018, and FirstNet Addendum (Addendum) effective July 12, 2018 (collectively the “FirstNet Agreements”), in which EDN agreed to be a Solutions Provider. The Agreement included a limitation of liability clause that stated: “No action or proceeding against either party may be commenced more than two years after the cause of action accrues.”2 The clause applied “regardless of the form of action, whether in contract, tort, strict liability or otherwise.”
   Motions for summary judgement were brought. The Court doesn’t describe the nature of the dispute because it wasn’t relevant to the decision whether the contract provision was enforceable. The Court granted AT&A’s motion to dismiss and had cogent and sensible reasons for doing so. First the Court found that the agreement provided that:
   “no action or proceeding against either party may be commenced more than two years after the cause of action accrues”, and then found that:
   “ that this limitation applies “regardless of the form of action, whether in contract, tort, strict liability or otherwise.”
   Another interesting argument was raised that the shortening provision should not be enforced because it violated Texas law, section 16.070, which sets the statute of limitations for breach of contract at 4 years from date of the breach occurred. The statute specifically prohibits shortening the statutory period by less than 2 years. The Court held that “more than two years” did not constitute a period of less than two years.
   Here’s a common mistake that’s easy to find, and easy to figure out that the draftsman should have his law license revoked: The time for computing the shortened time period commences ON THE DATE OF CONTRACT and not on the date of an occurrence. The obvious problem with that language is that the time to bring the action could very well be over before a breach of contract or negligent act causes damage.
   Stick to the Kirschenbaum Contracts TM and keep your contracts up to date because statutes and court decisions change often.

STANDARD FORMS Alarm / Security / Fire and related Agreements.   click here: www.alarmcontracts.com
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
www.KirschenbaumEsq.com