Limitation periods in construction contracts

The following Construction practice note provides comprehensive and up to date legal information covering:

  • Limitation periods in construction contracts
  • Contractual claims
  • Simple contracts and deeds
  • Commencement of the limitation period
  • Duration of the limitation period
  • Tort claims
  • Latent defects
  • Agreement as to limitation period
  • Impact on the statutory limitation period
  • Reasonableness of limitation period
  • More...

Limitation periods in construction contracts

The Limitation Act 1980 (LA 1980) (as amended by the Latent Damage Act 1986 (LDA 1986)) governs the time limits for bringing different types of legal claims. If a claim is brought outside of the relevant limitation period, the defendant will be able to plead in defence that the remedy sought by the claimant is time-barred. The most relevant limitation periods for the construction industry are those for contractual and tortious (negligence) claims, although the LA 1980 also specifies time periods for actions relating to personal injury, defective products and defamation. Further, there is a specified time limit for bringing a claim under the Defective Premises Act 1972.

Limitation can be particularly relevant in relation to claims arising out of defective works, as the cause of action may have arisen some years before the problem manifests itself. An example is where the contractor installs faulty foundations which result in cracking to walls and subsidence, but the problem only becomes evident some years later. In such a case, there is a possibility that the limitation period will have expired before the defect appears.

Contractual claims

Simple contracts and deeds

In law there are two types of contract:

  1. a simple contract (also known as a 'contract under hand' or a 'signed contract'), and

  2. a deed (also known as a 'contract under seal' or a 'speciality')

For a

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