Contractual Limitations Period Upheld
In Abari Construction Co., Inc. v. State of Illinois, 59 Ill. Ct. Cl. 316, 2007 WL 7076039 (2007), the Illinois Court of Claims dismissed a contractor's complaint for the contractor's failure to timely file suit under the terms of its contract with the Illinois Department of Transportation ("IDOT"). Abari sought delay damages from IDOT for a bridge reconstruction project. The contract mandated three levels of administrative review prior to commencement of suit before the Court of Claims, but also required that suit be filed within 60 days of the final decision from the IDOT third level reviewers.
Abari made a contract claim, which made its way through the administrative review process and a final decision was issued in January 2003. Abari did not file suit in the Court of Claims until October 2003, over eight months after the final decision was rendered by IDOT. The State, on behalf of IDOT, moved to dismiss the complaint as time-barred by the contractual limitations period.
The Court granted the State's motion to dismiss, noting that Illinois law is clear that parties can contractually agree to shorter limitations periods to replace statutory limitations periods, so long as the contractual period is reasonable. Moreover, the Court of Claims Act specifically allows for the applicability of shorter limitations periods than those set forth by the Court of Claims Act.
What should we take away from the holding in Abari? Quite simply, reasonable contractual limitations periods will be upheld in nearly any context. Contractors must be knowledgeable concerning the limitations periods in their contracts and vigilant in enforcing those limitations periods.
That is definitely correct. I dont want to take sides with this issue but the contracts should abide no matter what happens. it is the only thing that keeps the business fair.
Definitely reasonable. I started reading the story thinking this was going to be the big boy government agency beats up Joe Contractor but 8 months is a long time and a contract is a contract - especially a government contract!