Indianapolis, IN asked in Business Law for Indiana

Q: How is the statute of limitations determined when two parties to a contract live in different states.

One party is in a state that has a 6 year statute of limitations for a contract and the other party resides in a state with a 10 year statute of limitations for a contract. The person in the 10 year state wishes to sue the person in the 6 year state for breach of contract. How would the courts handle this situation?

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1 Lawyer Answer
Michael Ray Smith
Michael Ray Smith
  • Indianapolis, IN
  • Licensed in Indiana

A: The answer to that question is probably more complicated than you anticipated because it may depend on where the lawsuit is filed. There are also some nuances that can change the answer. I'm going to give you the short version of the answer, without addressing all the nuances. To get definitive advice, please consult an attorney.

Imagine a contract between an Indiana resident and a Kentucky resident. The Indiana resident sues the Kentucky resident in an Indiana court. Generally, an Indiana court will apply the Indiana statute of limitations, which may be different from the Kentucky statute of limitations. However, if the contract specifies that the contract will be governed by Kentucky law, including Kentucky's statute of limitations, an Indiana court will likely apply the Kentucky statute of limitations. Note, however, that the contract language must be broad enough to include the Kentucky statute of limitations and not just Kentucky contract law.

The problem is that each state has its own rules for deciding which law applies in lawsuits that involve more than one state. I've described how the rules generally work in Indiana. The rules could be different if the lawsuit were filed in another state. That's one of the reasons you should consult an attorney.

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