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Invoices Together with Purchase Orders Created an Agreement to a Reduced Sales-Contract Statute of Limitations

The Second Department determined the sales-contract statute of limitations was validly reduced from four years to one year by the terms of invoices:

While UCC 2-725(1) generally provides that a cause of action alleging breach of a sales contract must be commenced within four years after it has accrued, that provision also allows the parties to a sales contract to “reduce the period of limitation to not less than one year” (UCC 2-725[1]…). Here, the defendants met their initial burden by demonstrating that their invoices containing the one-year limitation period constituted an acceptance that, together with the plaintiff’s purchase order, was effective in forming a contract, and that the one-year limitation period, an additional term set forth in the invoices, was presumed to have become part of this contract between the parties unless one of the three exceptions in UCC 2-207(2) applied (see UCC 2-207[1], [2]…). It is undisputed that the plaintiff’s action was not commenced within one year from the alleged breach, as required by the additional term. The burden then shifted to the plaintiff, as the party opposing the inclusion of the additional term, to raise a question of fact as to whether one of the three exceptions under UCC 2-207(2) was applicable … . The plaintiff failed to satisfy its burden.

Contrary to the plaintiff’s contention, the abbreviated period of limitation was not against public policy (see CPLR 201; UCC 2-725[1]…). ” Absent proof that the contract is one of adhesion or the product of overreaching, or that [the] altered period is unreasonably short, the abbreviated period of limitation will be enforced'” … . ” Where the party against which an abbreviated Statute of Limitations is sought to be enforced does not demonstrate duress, fraud, or misrepresentations in regard to its agreement to the shortened period, it is assumed that the term was voluntarily agreed to'” … . State of Narrow Fabric, Inc. v UNIFI, Inc., 2015 NY Slip Op 02110, 2nd Dept 3-18-15

 

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