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84-2a-506. Statute of limitations. (1) An action for default under a lease contract, including breach of warranty or indemnity, must be commenced within four years after the cause of action accrued. By the original lease contract the parties may reduce the period of limitation to not less than one year.

(2) A cause of action for default accrues when the act or omission on which the default or breach of warranty is based is or should have been discovered by the aggrieved party, or when the default occurs, whichever is later. A cause of action for indemnity accrues when the act or omission on which the claim for indemnity is based is or should have been discovered by the indemnified party, whichever is later.

(3) If an action commenced within the time limited by subsection (1) is so terminated as to leave available a remedy by another action for the same default or breach of warranty or indemnity, the other action may be commenced after the expiration of the time limited and within six months after the termination of the first action unless the termination resulted from voluntary discontinuance or from dismissal for failure or neglect to prosecute.

(4) This section does not alter the law on tolling of the statute of limitations nor does it apply to causes of action that have accrued before this article becomes effective.

History: L. 1991, ch. 295, ยง 54; February 1, 1992.

KANSAS COMMENT, 1996

1. Subsection (1) establishes a four-year statute of limitations for actions asserting a default under a lease contract. The four-year limitation period expressly extends to actions for indemnity and breach of warranty and does not exclude breach of warranty actions seeking damages for personal injury. This is contrary to the approach taken by the Kansas federal courts under Article 2, but consistent with the better interpretation of section 84-2-725, the statutory analogue. See 1996 Kansas Comment 4 to 84-2-725 for further discussion.

2. Unlike the statutory analogue, subsection (1) does not forbid the parties to a lease contract to extend the limitation period beyond four years. The Official Comments to this section explain that a longer limitation period may be appropriate, if the parties so conclude, because certain breach of warranty and indemnity claims may diminish over time and the party with the claim should not be forced to file suit because of the imminent running of the statute of limitations. Subsection (1), like the statutory analogue, permits the parties by agreement to reduce the limitation period to not less than one year. In cases within the Kansas Consumer Protection Act, K.S.A. 50- 623 et seq., however, the prohibition against limiting remedies in implied warranty cases (K.S.A. 50-639(a)) may prohibit reducing the statute of limitations in those cases.

3. Subsection (2) adopts a more liberal rule than the statutory analogue for determining when a cause of action accrues. A cause of action for default accrues either when default occurs or when the act or omission on which the default (or breach of warranty) is based is or should have been discovered, whichever is later. A similar discovery rule applies to indemnity claims. This is a significant change from Article 2, under which the cause of action accrues on breach, or, in the case of breach of warranty, on tender of delivery regardless of whether the aggrieved party knows of the breach. See 1996 Kansas Comment 2 to 84-2-725.

4. Subsection (3) is a saving provision that is comparable in substance to section 84-2-725(3) and K.S.A. 60-518. Subsection (4), like section 84-2-725(4), makes clear that this section does not affect the law on tolling the limitation period. See, e.g., 60-520. Common law tolling doctrines, such as fraudulent concealment and estoppel, likely apply under this section as well. Cf. Zurn Contractors, Inc. v. B.F. Goodrich Co., 746 F. Supp. 1051 (D. Kan. 1990) (construing section 84-2-725).


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