A case heard in Newcastle at the end of July illustrates the importance of limitation clauses. In Inframatrix Investments Limited v Dean Construction Limited [2012] the employer, Inframatrix, issued a contract. The contract contained a 12 year limitation clause. Dean, the contractor, amended the limitation period to 12 months. The works did not go well and Inframatrix issued a claim for defective workmanship. Unfortunately the claim was issued after the 12 month period and Dean argued that the claim was brought out of time. Inframatrix tried to sidestep the limitation period but it failed to persuade the judge. He decided that the 12 month limitation clause was effective and he therefore struck out Inframatrix’s claim.
It is unusual to see such a short limitation period in construction contracts. However, if you are an employer and you stumble across one, you should ask for something sensible so that you have long enough to bring a claim. If you are a contractor, you may want to keep quiet …