Legal Alert: Contractual Limitation of Action Provisions And Why You Need Them

Recently, the Georgia Court of Appeals released its Opinion in the case of Langley v. MP Spring Lake, LLC upholding a contractually specified reduction in the statute of limitations for a residential tenant to assert a claim against a Landlord or Property Manager.  Under Georgia law, the standard statute of limitations for personal injury claims is two (2) years, for property damages claims is four (4) years, and for breach of written contract claims is six (6) years. 

The Tenant filed her suit on the two year anniversary of the date that the accident occurred, which ordinarily would have been allowable under Georgia’s two year personal injury statute of limitations for personal injuries.  However, in her lease, the Tenant agreed to a provision that stated as follows:

Limitations on Actions.  To the extent allowed by law, Resident also agrees and understands that any legal action against Management or Owner must be instituted within one year of the date any claim or cause of action arises and that any action filed after one year from such date shall be time barred as a matter of law.

The Georgia Court of Appeals upheld the trial court’s ruling that the one year statute of limitation clause in her lease barred her claims.  The Court rejected Langley’s arguments that the clause was not meant to cover personal injury claims, finding that the clause, by its clear and unambiguous terms, applied to “any action, not just those which arose from breaches of the lease.”  Langley v. MP Spring Lake, LLC, 813 S.E.2d 441 (Ga. Ct. App. 2018), reconsideration denied (May 15, 2018).

In reaching that decision, the Court of Appeals noted that, in Georgia, parties are free to contract on whatever terms they wish so long as they don’t violate a statute or the State’s public policy.  Because there was no statute directly prohibiting the parties from reducing the personal injury statute of limitations nor was there any binding precedent holding that such a limitation was in violation of Georgia’s public policy, the Court of Appeals upheld the one year statute of limitations specified in the contract.

The implication from this ruling for commercial and residential landlords is that they should include contractual limitation of action provisions in their Georgia leases and contracts which have the effect of limiting the time within which tenants can bring suit against them.
For more information about this or a contract review please contact Bill Buhay at bbuhay@wwhgd.com or 404.832.9536 or Josh Wood at jwood@wwhgd.com or 404.832.9554.

This alert provides a general overview of recent legal developments.  It is not intended and should not be relied upon as legal advice.