Waiving the statute of limitations?
Updated: Nov 14, 2019
Radiance Capital v. Foster (Va. Oct. 24, 2019)
Two men guaranteed a loan. The guarantee prospectively waived their right to raise statute of limitations as a defense. Is this waiver enforceable? Virginia Supreme Court: No.
The general rule is that people may contractually waive any rights conferred by law or contract. But statute of limitations waivers are special. Under Virginia Code § 8.01-232, for this sort of waiver to be valid, it must be:
made in writing,
made to avoid or defer litigation pending settlement,
made for an additional term not longer than the default term, and
not made at the same time as any other contract.
All four elements are required. In this case, the waiver satisfied the first (it was in writing), but not the others. So it was unenforceable.
Bottom line: Parties have considerable freedom to choose the rules that will apply to their contracts (including potential defenses), but there are limits.